Candlestick patterns are the alphabet of price action. Learn the 13 most useful ones below — what each looks like, what it means, and how traders act on it — then practice spotting them for free.
▶ Practice these patterns free →A candlestick shows four prices for a period: the open, high, low and close. A green candle closes above its open (buyers won); a red candle closes below (sellers won). The thick part is the body; the thin lines are the wicks. Patterns emerge from the shape and sequence of these candles.
A hammer forms after a downtrend. It has a small body near the top and a long lower wick at least twice the body. It shows sellers pushed price down but buyers slammed it back up, hinting at a bullish reversal near support. Traders often wait for the next candle to close higher before buying, placing a stop-loss below the hammer's low.
The inverted hammer also appears after a downtrend, but the long wick points up. Buyers tested higher prices before sellers pulled back. It signals weakening selling pressure and a possible bottom, especially when the following candle confirms with a strong green close.
A bullish engulfing is a two-candle pattern where a large green candle completely covers the previous red candle's body. It shows buyers overwhelming sellers. It is more reliable at support and with above-average volume.
The mirror of the above: a big red candle engulfs the prior green one, showing sellers taking control. At resistance it warns longs to exit or book profit.
A three-candle bottom: a big red candle, a small indecision candle, then a strong green candle. It marks the end of a downtrend and the start of a possible up move.
The three-candle top: big green, small candle, then a big red. It marks the end of an uptrend and a likely turn lower.
A single candle at resistance with a small body and a long upper wick. Buyers pushed high but sellers rejected the move, hinting at a top.
Shaped like a hammer but appearing after an uptrend, with a long lower wick. It warns that sellers are starting to step in near a top.
A doji has an almost equal open and close, forming a cross. Neither side won. It is not a signal on its own — wait for the next candle to confirm direction.
A small body with wicks on both sides. Like a doji, it shows indecision and often precedes a change or pause in the trend.
Three strong green candles in a row, each closing higher. It shows steady, confident buying and often confirms a trend change to the upside.
Three strong red candles in a row, each closing lower. It shows steady selling pressure and confirms a move to the downside.
A pattern alone is never a trade signal. The three things that matter together are: where the pattern forms (support or resistance), volume confirmation, and a clear risk plan (entry, stop-loss and target with at least a 1:2 risk-reward). Around 70% of intraday traders lose money — usually from trading without a stop-loss and forcing trades every day. Patience and discipline are the real edge.
▶ Test yourself on all 13 patterns →Candlestick patterns are shapes formed by one or more price candles that hint at what buyers and sellers may do next. Traders combine them with support, resistance and volume to plan trades.
Use the free Candlestick Pattern Trainer at candlestrainer.com. It shows you a chart, asks which pattern it is, and whether to buy, sell or wait, then gives instant feedback with entry and stop-loss.
Beginners should start with the hammer, bullish and bearish engulfing, doji, and the morning and evening star. These are common, easy to spot, and appear across all timeframes.
They can help intraday traders spot turning points, but they are not guarantees. Always confirm with the level and volume, use a stop-loss, and paper trade before risking real money.
No single pattern is reliable alone. Engulfing patterns and morning/evening stars are considered stronger, especially at key support or resistance with high volume.