39 Different Types of Candlesticks Patterns
39 Different Types of Candlesticks Patterns
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3/20/24, 11:06 PM 39 Different Types of Candlesticks Patterns
Different types of candlestick patterns tell you a different story about the
price chart. Candlestick patterns have been accepted fairly by the
traders worldwide to be the most effective technical tool for reading a
price chart.
Candlestick patterns are made by plotting the open, high, low and close
prices of any specific stock over some time. Each candle contains a
body and wicks, which showcases the opening and closing, high and low
price of the security. Traders take trading decisions by using candlestick
patterns to identify the repeating behavior of the markets.
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1. Bullish Engulfing How may I help you today?
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Bullish Indicators.pattern
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The pros of this candlestick pattern are that it provides the traders with
an early sign of a potential trend reversal. Bullish engulfing pattern is
also very easy to spot on the price chart.
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The pros of this candlestick pattern are that it is easier to identify, and
gives traders a warning signal of a potential trend reversal. Traders also
use the low of the bullish spinning top pattern as a stop loss of their
bullish trade position.
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Bearish spinning top shows the confusion in the market. It tells us that
neither sellers nor buyers are currently in hold of the markets.
The pros of the bearish spinning top are that it provides traders with an
early sign of a potential trend reversal and the pattern is clearly
established for even beginners to spot.
The cons of this candlestick pattern are that it is not as strong as other
candlestick patterns and can generate false signals.
4. Bullish Harami
Bullish harami candlestick pattern is a 2-candle pattern. Bullish harami
pattern occurs when a small body (Green) candle forms under a bigger
body (Red) candle. This pattern usually occurs at the bottom of the chart
and signals a potential bullish trend reversal.
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The pros of the bullish harami pattern are that it gives traders an early
signal of the potential bullish trend reversal and is easy to spot on a
naked chart.
The cons of this candlestick pattern are that it can generate a false
signal and some additional confirmation may be required to approve the
authenticity of this candlestick pattern.
5. Tweezer Bottom
The Tweezer bottom candlestick pattern is a bullish reversal pattern.
Tweezer bottom pattern occurs when there are two or more candles with
identical lows that mark a horizontal line of support. This candlestick
pattern is generally formed on the bottom of a price chart.
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The pros of tweezer bottom pattern are that it is a strong bullish reversal
pattern which can also be used with conjunction of other technical
indicators as well.
The con of this pattern is that like all other technical tools, this pattern
can also generate false trading signals.
6. Bearish Engulfing
Bearish engulfing candlestick pattern indicates that sellers have now
taken control over the market. Bearish engulfing pattern also shows that
the number of sellers have outweighed the number of buyers. This
candlestick pattern can be spotted on the top of the price chart and is
perceived as the potential market top.
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Bearish engulfing can be identified when a small green candle’s high and
low are breached by a large red candle at the top of a price chart. For
further confirmation, traders often used technical indicators such as
volume.
The pros of this candlestick pattern are that it provides the traders with
an early sign of a potential bearish trend reversal. This candlestick
pattern is also easier to spot on the naked price chart.
A con of this candlestick pattern is that like all technical tools, this
candlestick pattern too can generate false trading signals.
7. Doji
Doji candlestick pattern occurs when the price of a stock opens and
closes at almost the same level. Doji candlestick patterns become very
easy to spot as it has an almost non-existent body.
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Doji is a very simple pattern to spot because of its structure. You just
have to look for a candlestick pattern that has a very small or no body at
all.
The pros of this candlestick pattern are that it signals an early sign of a
potential trend reversal and that it is very easy to spot on a naked chart.
The con of a doji is that it can be formed multiple times on a price chart
and create confusion for a trader. Also, it can also generate false trading
signals.
8. Gravestone Doji
Gravestone doji candlestick pattern indicates a potential bearish trend
reversal. Gravestone doji is generally formed at the top of the price chart.
Traders interpret this pattern as a sign to take a bearish trade in the
underlying stock.
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Gravestone doji essentially tells us that buyers were trying to take the
market higher but eventually sellers took control of the market. The long
wick on the upper side of this candle shows that buyers have lost the
momentum.
The pros of gravestone doji are that it signals a potential bearish trend
reversal and it can also be easily identified on the naked chart.
Gravestone doji can also be used with the combination of other technical
indicators.
The cons of this candlestick pattern are that it can generate false trading
signals and the formation of the gravestone doji has become very rare.
9. Dragonfly Doji
Dragonfly doji candlestick pattern indicates a potential bullish trend
reversal. Dragonfly doji is generally formed at the bottom of the price
chart. Traders interpret this pattern as a signal to take a bullish trade in
the underlying stock.
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Dragonfly doji tells us that the sellers were pushing the market on the
lower side but they eventually lost control to increasing buying pressure.
The long wick on the lower side of this candle shows the strength of
buyers on that particular price level.
Dragonfly doji can be spotted at the bottom of a price chart. You will just
have to look for a candle having a long wick on its lower side with the
price opening and closing at nearly the same level.
The pros of dragonfly doji are that it gives trades an early signal of a
potential bullish trend reversal and it can also be identified easily on the
naked chart. This candlestick pattern becomes more effective when
used with the combination of other technical tools.
The con of this candlestick pattern is that it can generate false trading
signals.
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2. The second candle is a strong bullish candle which covers both the
highs and lows of the first candle
3. The third candle resumes the new trend by breaking above the
second candle’s high
The con of the three outside up candlestick patterns is that like all
technical tools, it can generate false trading signals.
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3/20/24, 11:06 PM 39 Different Types of Candlesticks Patterns
Three inside down pattern is a strong bearish pattern which shows that
the bulls tried to take the market further up but lost against immense
selling pressure. This pattern also signals a potential top in the making.
This candlestick pattern is spotted on the top of the price chart. Spotting
three inside down candlestick pattern is very easy.
The con of the three inside down candlestick pattern is that like all
technical tools, it can too generate false trading signals.
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3/20/24, 11:06 PM 39 Different Types of Candlesticks Patterns
A long legged doji leaves long wicks on both of its sides and the price
opens and closes at nearly the same price. This pattern signals that the
buyers and sellers are evenly matched and there is no confirmation of
the future trend.
The cons of this pattern are that it can provide false trading signals and
it creates confusion between the traders.
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Hanging man indicates that the buyers are slowing down and sellers
have entered the market. Sellers have started to take positions and the
market can potentially start going downwards from this level.
Hanging man can be spotted after a bullish rally near the top of the price
chart. Hanging man is easier to spot because of its structure.
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The pros of these patterns are that they are easy to spot on the price
chart and the probability rate of these patterns are high.
The con of double candlesticks patterns is that they can still generate
false trading signals.
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Bullish kicker pattern indicates that the buyers have made a comeback
with a strong desire to push the prices further up. This pattern also
represents the quick sentiment shift of the market participants.
The bullish kicker candlestick pattern can be easily spotted on the naked
price chart at bottom.
The pros of this pattern are that it is a very strong pattern and it is also
supported by strong amounts of volume most of the time.
The cons of this pattern are that the bullish kicker pattern does not occur
most of the times and beginner traders can confuse this pattern with the
gap-up pattern.
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This candlestick pattern can be found on the bottom of the price chart.
The pros of this pattern are that this candlestick pattern is strong and
easy to spot on a naked price chart.
The cons of the piercing line candlestick pattern are that its occurrence
is rare and beginners can confuse this pattern with another candlestick
pattern.
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Bearish kicker pattern indicates that the sellers are back with conviction.
This pattern also represents the quick sentiment shift of the market
participants.
The bearish kicker candlestick pattern can easily be spotted on the top
of a naked price chart.
The pros of this pattern are that it is a very strong pattern and
oftentimes, this pattern is supported by strong amounts of volume.
The cons of this pattern are that the occurrence of the bearish kicker
pattern is rare and beginner traders can end up confusing this pattern
with the gap-down pattern.
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This candlestick pattern can be easily spotted at the top of a naked price
chart. You just have to look at a bearish candle that has opened above a
bullish candle’s high but has closed below the midpoint of its previous
candle.
The pros of this pattern are that the candlestick pattern is strong and
easy for a beginner to spot.
The cons of the dark cloud cover pattern are that its occurrence is rare
and beginners can confuse this pattern with another candlestick
pattern.
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The pros of the bearish harami pattern are that it gives traders an early
signal of the potential bearish trend reversal and this pattern is easy to
spot on a naked chart.
The cons of this candlestick pattern are that it can generate a false
trading signal and it also requires some additional confirmation to
approve the authenticity of this candlestick pattern.
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The Tweezer top pattern can be easily spotted at the top of the price
chart.
The pros of the tweezer top pattern are that it is a strong bearish reversal
pattern which can also be used with the conjunction of other technical
indicators.
The con of this pattern is that like all other technical tools. This pattern
can also generate false trading signals.
21. Marubozu
A marubozu candlestick pattern can be bullish as well as bearish.
Morubozu candlestick pattern is formed when a candle opens at the low
or high of the previous candle and closes at the opposite end without
leaving any wicks.
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The pros of this pattern are that this pattern is strong and easy for even
beginners to spot on the naked price chart.
The con of this pattern is that this pattern can get very risky to trade for
beginner traders.
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The triple candlestick patterns can be formed on either side of the chart.
The pros of these patterns are that they are easy to spot on the naked
price chart and the probability rate of these patterns are high.
The con of triple candlestick patterns is that they can still generate false
trading signals.
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Morning Star Doji is a very strong bullish reversal which shows that the
bears have lost the momentum and now the bulls have taken over and
will continue to rally the market up.
The pros of this pattern are that this pattern provides a clear indication
of trend reversal and it also provides the traders with a favorable risk-to-
reward ratio.
The cons of this pattern are that this pattern can generate false trading
signals and this pattern also takes a long time to develop on the price
chart.
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This candlestick pattern occurs very rarely. The market only reacts this
wildly when the euphoria or fear within market participants is very
strong.
The pros of this pattern are that the probability rate of this pattern is high
and its very easy to identify.
The con of this pattern is that the occurrence of this pattern is very rare.
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This pattern is formed at the bottom of the price chart and can be easily
spotted on the naked price chart.
The pros of this candlestick pattern are that the probability rate of this
pattern is high and it can be easily spotted on the naked chart.
The cons of this candlestick pattern are that it can still generate false
trading signals and this pattern is not that effective without the use of
any other additional technical tool.
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Evening star doji is a very strong bearish reversal which shows that the
bulls have lost the momentum and now the bears have taken over.
The pros of this pattern are that this pattern provides a clear indication
of trend reversal and it also provides the traders with a favorable risk to
reward ratio.
The con of this pattern is that this pattern can generate false trading
signals.
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This pattern is formed at the top of the price chart and can be easily
spotted on the naked price chart.
The pros of this candlestick pattern are that the probability rate of this
pattern is high and it is easier for even beginners to spot this pattern on
the price chart.
The con of this pattern is that it can still generate false trading signals
and this pattern is not that effective without the use of any other
additional technical tool.
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In order for this pattern to be valid, each candle must open above the
previous candle’s low and close above the previous candle’s high. This
indicates the strength of the buyers.
This candlestick pattern can be spotted at the bottom of the chart right
after a bearish rally ends. It is fairly easy to spot this pattern because of
its structure.
The pros of this pattern are that the probability rate of this pattern is very
high and the structure of this candlestick pattern can be easily spotted
by even a beginner trader.
The con of this pattern is that the occurrence of this candlestick pattern
is very rare.
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This pattern is only valid when each candle opens below the previous
candle high and closes below the previous candle’s low. This shows the
strength of the sellers.
This candlestick pattern can be spotted at the top of the chart right after
a bullish rally. The structure of this pattern makes it easier for this
pattern to be spotted on the naked chart.
The pros of this pattern are that the probability rate of this pattern is very
high and the structure of this candlestick pattern can easily be spotted
by even a beginner trader.
The con of this pattern is that the occurrence of this candlestick pattern
is very rare.
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The long upper wick of the pattern represents that initially the buyers
were looking to take the prices further up but they eventually lost control
and the sellers are now in control.
Shooting star is very easy to spot on the naked chart because of its
structure. This pattern is formed at the top of the price chart and marks
the potential top of the market.
The pros of this pattern are that it provides the traders with clear
indication of a potential trend change and traders can also place their
stop losses at the shooting star’s high.
The cons of this pattern are that it can generate false trading signals and
it can be accurate in specific market conditions but it is not accurate in
the sideways market.
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Occasions like this happen very rarely. The market only reacts this wildly
when the fear or euphoria within the market participants is at its peak.
Bearish abandoned baby pattern is formed at the top of the price chart
and is very easy to spot because of its structure.
The pros of this pattern are that the probability rate of this pattern is high
and it is very easy to identify.
The con of this pattern is that the occurrence of this pattern is very rare.
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The con of this pattern is that there is no confirmation that the market
will continue to go up higher.
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The con of this pattern is that there is no guarantee that the market will
continue to go down.
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This candlestick pattern forms at the top of the price chart and can be
spotted easily because of its structure.
The pros of this pattern are that this pattern provides a strong indication
of a market reversal and this pattern can also be easily seen on the price
chart.
The con of this pattern is that it can generate false trading signals.
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This candlestick pattern forms at the bottom of the price chart and can
be spotted easily because of its structure.
The pro of this pattern is that this pattern provides a clear indication of a
potential market reversal.
The con of this pattern is that it can still generate false trading signals.
36. Tri-Star
The Tri star candlestick pattern is a potential trend reversal pattern. The
tri star pattern can be bearish as well as bullish. If this pattern is formed
on the bottom of the chart, it becomes a bullish pattern and vice versa.
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You can spot this pattern at the bottom as well as at the top of the price
chart. The way this pattern looks makes it easier for even a beginner
trader to spot it.
The con of this pattern is that the occurrence of this pattern is very rare.
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The pros of these patterns are that they are easy to spot on the price
chart and the probability rate of these patterns are high.
The con of double candlesticks patterns is that they can still generate
false trading signals.
38. Hammer
A hammer candlestick pattern is a single candlestick pattern which
indicates a potential bullish trend reversal. A hammer is formed at the
bottom of the price chart when a candle leaves a long weak on its lower
side and has a very short or no body.
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3/20/24, 11:06 PM 39 Different Types of Candlesticks Patterns
Hammer shows that despite sellers trying really hard when the candle
opened, buyers were still able to take the market up towards the closing
of the candle. This shows the strength of the buyers. This also indicates
that the buyers are now in control.
This candlestick pattern can be easily found when the market makes a
bottom after a downtrend.
The con of this pattern is that the reliability of this pattern is low
compared to other candlestick patterns.
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3/20/24, 11:06 PM 39 Different Types of Candlesticks Patterns
The pros of this pattern are that it provides a strong indication of the
potential trend change and it is also easy to identify on the naked chart.
The con of this pattern is that the reliability of this solo candlestick
pattern is low.
You must first learn about all candlestick patterns. After doing so, start
with just looking at the price charts. Look at each candle one by one. If
We'rethat
you come across a familiar candlestick pattern, mark Online!
pattern and try
to identify the name and characteristics of that candlestick pattern.
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