Candlestick Patterns

Small body at the top of the candle's range with a long lower wick at least 2x the body. Forms after a downtrend and signals buyers absorbed the day's selling.

Entry

Buy on the next bar if it opens above the hammer's close, or wait for a confirmation close above the hammer's high.

Stop

Below the hammer's low (below the lower wick).

Target

Prior swing high or next major resistance. Hammer alone has no measured-move target - use surrounding structure.

Avoid

Hammers without a real preceding downtrend are just small candles - the pattern needs an exhausted downmove to mean anything.

Small body at the bottom of the range with a long upper wick at least 2x the body, after a downtrend. Buyers tested higher prices but couldn't hold - still bullish if the next bar closes higher.

Entry

Wait for a confirmation candle that closes above the inverted hammer's high. No confirmation = no trade.

Stop

Below the inverted hammer's low.

Target

Prior swing high or the next overhead resistance.

Same shape as the hammer (small body up top, long lower wick) but appearing after an uptrend. Long wick shows sellers tested deep below - early warning of distribution.

Entry

Sell on the next bar if it closes below the hanging man's low, confirming the reversal.

Stop

Above the hanging man's high.

Target

Prior swing low or next major support.

Avoid

Often fails as a single-bar signal in strong uptrends - confirmation candle is mandatory.

Small body at the bottom of the range with a long upper wick at least 2x the body, after an uptrend. Buyers pushed price up; sellers rejected and drove it back down.

Entry

Sell on the next bar's close below the shooting star's low.

Stop

Above the shooting star's high (above the upper wick).

Target

Prior swing low or the next major support.

Open and close at roughly the same price, producing a cross-shaped candle. Reflects equilibrium between buyers and sellers - meaningful only after a clear trend, when it signals indecision and possible reversal.

Entry

No entry on a doji alone. Wait for the next bar to confirm direction (close above the doji's high for long; below the low for short).

Stop

Beyond the doji's high or low, depending on direction.

Target

Determined by the confirming move's structure, not the doji itself.

Doji where the open, high, and close are at the top of the range with a long lower wick. Sellers controlled most of the session; buyers reclaimed everything by the close. Strong bullish exhaustion signal at lows.

Entry

Buy on the next candle's close above the dragonfly's high.

Stop

Below the dragonfly's low.

Target

Prior swing high or next resistance level.

Doji where the open, low, and close are at the bottom of the range with a long upper wick. Buyers pushed up but sellers rejected the entire move - bearish exhaustion at highs.

Entry

Sell on the next candle's close below the gravestone's low.

Stop

Above the gravestone's high.

Target

Prior swing low or next major support.

A long bullish candle with no wicks (or near-zero wicks) - opens at the low, closes at the high. Pure buying pressure with no rejection. Strong continuation signal in established uptrends.

Entry

Buy on a pullback to the marubozu's open or the prior swing low; or buy on the next candle's open if continuing momentum is needed.

Stop

Below the marubozu's open price.

Target

Next major resistance or measured move from prior consolidation.

A long bearish candle with no wicks - opens at the high, closes at the low. Pure selling pressure. Strong continuation signal in established downtrends.

Entry

Sell on a bounce to the marubozu's open, or short the next candle's open if momentum continues.

Stop

Above the marubozu's open price.

Target

Next major support or measured move from prior consolidation.

Small body with upper and lower wicks of similar length. Reflects a session where neither side won decisively - common in chop, but meaningful at the end of a trend as a stalling signal.

Entry

No standalone entry. Wait for confirmation - a close beyond the spinning top's high or low determines direction.

Stop

Beyond the opposite end of the spinning top's range.

Target

Set by the structure of the confirming move.

A small bearish candle followed by a larger bullish candle whose body fully engulfs the prior body. Forms after a downtrend - buyers overwhelmed sellers in a single session.

Entry

Buy on the close of the engulfing candle, or on a pullback that holds above its midpoint.

Stop

Below the engulfing candle's low.

Target

Prior swing high or next resistance level.

Avoid

Engulfing patterns inside ranges (no preceding downtrend) frequently fail - the pattern needs trend exhaustion to work.

A small bullish candle followed by a larger bearish candle whose body fully engulfs the prior body. Forms after an uptrend - sellers overwhelmed buyers in one session.

Entry

Sell on the close of the engulfing candle, or on a bounce that fails near its midpoint.

Stop

Above the engulfing candle's high.

Target

Prior swing low or next major support.

A long bearish candle followed by a small bullish candle whose body sits entirely inside the prior body. Selling pressure ran out; buyers tested but didn't push hard. Early reversal warning.

Entry

Wait for confirmation - a third candle closing above the harami's high.

Stop

Below the long bearish candle's low.

Target

Prior swing high or major resistance.

A long bullish candle followed by a small bearish candle whose body sits entirely inside the prior body. Buying pressure stalled; sellers tested but didn't break down. Early reversal warning.

Entry

Wait for a third candle that closes below the harami's low.

Stop

Above the long bullish candle's high.

Target

Prior swing low or major support.

A long bearish candle followed by a bullish candle that opens below the prior low and closes above the midpoint of the prior body. Reverses bearish momentum without fully engulfing - milder but valid signal.

Entry

Buy on the close of the piercing candle, or on the next bar's open above the piercing close.

Stop

Below the piercing candle's low.

Target

Prior swing high or next resistance.

A long bullish candle followed by a bearish candle that opens above the prior high and closes below the midpoint of the prior body. Reverses bullish momentum without fully engulfing.

Entry

Sell on the close of the dark-cloud candle, or on the next bar's open below it.

Stop

Above the dark-cloud candle's high.

Target

Prior swing low or next support.

Two adjacent candles with matching lows after a downtrend. The shared low signals buyers defended the same price twice - a structural floor forming in real time.

Entry

Buy on the close of the second tweezer candle if it closes near its high; otherwise wait for confirmation above the second candle's high.

Stop

Below the matching low.

Target

Prior swing high or major resistance.

Two adjacent candles with matching highs after an uptrend. The shared high signals sellers rejected the same price twice - a structural ceiling forming.

Entry

Sell on the close of the second tweezer candle, or on confirmation below the second candle's low.

Stop

Above the matching high.

Target

Prior swing low or major support.

A bearish candle followed by a strong bullish candle that gaps up significantly above the prior open. One of the most powerful single-day reversal signals - shows a complete shift in conviction overnight.

Entry

Buy on the kicker candle's open or close, or on the next session if continuing momentum is desired.

Stop

Below the kicker candle's low or the bearish candle's open.

Target

Prior swing high or next major resistance.

Avoid

Rare in liquid markets without news. Often appears around earnings or macro shocks - context determines whether the gap holds.

A bullish candle followed by a strong bearish candle that gaps down significantly below the prior open. The bearish mirror of the bullish kicker - a sudden, complete shift in conviction.

Entry

Sell on the kicker candle's open or close.

Stop

Above the kicker candle's high or the bullish candle's open.

Target

Prior swing low or next major support.

Three-candle reversal: long bearish candle, then a small-bodied indecision candle (often a doji) that gaps lower, then a strong bullish candle that closes well into the first candle's body. The middle candle is the exhaustion bar.

Entry

Buy on the close of the third candle, or on a pullback into its midpoint that holds.

Stop

Below the low of the middle candle.

Target

Prior swing high or the next major resistance.

Three-candle reversal: long bullish candle, then a small-bodied indecision candle (often a doji) that gaps higher, then a strong bearish candle closing well into the first candle's body.

Entry

Sell on the close of the third candle, or on a bounce into its midpoint that fails.

Stop

Above the high of the middle candle.

Target

Prior swing low or next major support.

Three consecutive long bullish candles, each closing near its high, each opening within the prior body. Strong shift from selling to buying that often marks the start of a new uptrend.

Entry

Buy on the close of the third candle (aggressive) or on a pullback that holds above the third candle's open (conservative).

Stop

Below the first candle's open or low.

Target

Prior swing high or the next major resistance level.

Avoid

If the third candle has a long upper wick, the move is exhausting - skip the trade.

Three consecutive long bearish candles, each closing near its low, each opening within the prior body. Sustained shift from buying to selling - often the start of a new downtrend.

Entry

Sell on the close of the third candle, or on a bounce that fails below the third candle's open.

Stop

Above the first candle's high or open.

Target

Prior swing low or next major support.

Bullish-harami pattern (long bearish candle then small bullish candle inside it) followed by a third bullish candle that closes above the first candle's open. The third candle confirms the harami's reversal.

Entry

Buy on the close of the third candle.

Stop

Below the first bearish candle's low.

Target

Prior swing high or next resistance.

Bearish-harami pattern (long bullish then small bearish inside) followed by a third bearish candle closing below the first candle's open. The third candle confirms the reversal.

Entry

Sell on the close of the third candle.

Stop

Above the first bullish candle's high.

Target

Prior swing low or next support.

Bullish-engulfing pattern (small bearish candle then larger bullish engulfing it) followed by a third bullish candle closing above the second's high. The third candle confirms the engulfing reversal with continuation.

Entry

Buy on the close of the third candle.

Stop

Below the engulfing candle's low.

Target

Prior swing high or major resistance.

Bearish-engulfing pattern followed by a third bearish candle closing below the engulfing candle's low. The third candle confirms the reversal with sustained selling.

Entry

Sell on the close of the third candle.

Stop

Above the engulfing candle's high.

Target

Prior swing low or major support.

Long bearish candle, then a doji that gaps below the first candle's low (no overlap), then a strong bullish candle that gaps above the doji (also no overlap). The isolated doji is the abandoned baby - extreme bullish reversal.

Entry

Buy on the close of the third candle.

Stop

Below the doji's low.

Target

Prior swing high or major resistance.

Avoid

Rare in modern markets without overnight gap risk; common in equities, less reliable in 24-hour markets like crypto.

Long bullish candle, then a doji that gaps above the first candle's high (no overlap), then a strong bearish candle that gaps below the doji. Mirror of the bottom version - extreme bearish reversal.

Entry

Sell on the close of the third candle.

Stop

Above the doji's high.

Target

Prior swing low or major support.