All 35 Candlestick Chart

Patterns in the Stock Market-

Explained
The candlesticks are used for identifying trading patterns which help the technical
analyst to set up their trades.

These candlestick patterns are used for predicting the future direction of the price
movements.

The candlestick patterns are formed by grouping two or more candlesticks in a

certain way.

Sometimes powerful signals can be also given by just one candlestick.

In this blog, we will discuss all 35 powerful candlestick patterns, but before that let us
discuss how to read candlestick charts.

Table Of Contents
 How to Read Candlestick charts?

 35 Types of Candlestick Patterns:

o 1. Hammer:

o 2. Piercing Pattern:

o 3. Bullish Engulfing:

o 4. The Morning Star:

o 5. Three White Soldiers:

o 6. White Marubozu:

o 7. Three Inside Up:

o 8. Bullish Harami:

o 9. Tweezer Bottom:

o 10. Inverted Hammer:

o 11. Three Outside Up:

o 12. On-Neck Pattern:

o 13. Bullish Counterattack-

 Bearish Candlestick Pattern:

o 14. Hanging man:

o 15. Dark cloud cover:

o 16. Bearish Engulfing:

o 17. The Evening Star:

o 18. Three Black Crows:

o 19. Black Marubozu:

o 20. Three Inside Down:

o 21. Bearish Harami:

o 22. Shooting Star:

o 23. Tweezer Top:

 o 24. Three Outside Down:

o 25. Bearish Counterattack-

 Continuation Candlestick Patterns:

o 26. Doji:

o 27. Spinning Top:

o 28. Falling Three Methods:

o 29. Rising Three Methods:

o 30. Upside Tasuki Gap:

o 31. Downside Tasuki Gap:

o 32. Mat-Hold-

o 33. Rising Window-

o 34. Falling Window-

o 35. High Wave-

How to Read Candlestick charts?

Candlestick charts were originated in Japan over 100 years before the West had

developed the bar charts and point-and-figure charts. In the 1700s, a Japanese man

known as Homma discovered that as there was a link between price and the supply

and demand of rice, the markets also were strongly influenced by the emotions of

traders.

A daily candlestick charts shows the security’s open, high, low, and close price for

the day. The candlestick’s wide or rectangle part is called the “real body” which

shows the link between opening and closing prices.

This real body shows the price range between the open and close of that day’s

trading.
When the real body is filled, black or red then it means that the close is lower than

the open and is known as the bearish candle. It shows that the prices opened, the

bears pushed the prices down and closed lower than the opening price.

If the real body is empty, white or green then it means that the close was higher than

the open known as the bullish candle. It shows that the prices opened, the bulls

pushed the prices up and closed higher than the opening price.

The thin vertical lines above and below the real body is knowns as the wicks or

shadows which represents the high and low prices of the trading session.

The upper shadow shows the high price and lower shadow shows the low prices

reached during the trading session.

 Before we jump into learning about different candlestick charts, there are few

assumptions which need to be kept in mind that are specific to the candlestick

charts.

1. Strength is represented by a bullish or green candle and weakness by a

bearish or red candle. One should ensure that whenever they are buying

it is a green candle day and whenever they are selling, ensure that it’s a

red candle day.

2. The textbook definition of a patterns states certain criteria, but one

should state that there could be minor variations to the pattern

depending on certain market conditions.

3. One should look for a prior trend. If you are looking at a bullish reversal

pattern, then the prior trend should be bearish and if you are looking for

a bearish reversal pattern then the prior trend should be bullish.

35 Types of Candlestick Patterns:

The candlestick patterns can be divided into:

 Continuation Patterns

 Bullish Reversal Patterns

 Bearish Reversal Patterns

Below is the list of 30 Types of Candlestick Patterns which is categorised in

the above categories:

Bullish Reversal Candlestick
Patterns:
Bullish Reversal candlestick patterns indicate that the ongoing downtrend is going to
reverse to an uptrend.

Thus, the traders should be cautious about their short positions when the bullish
reversal candlestick chart patterns are formed.

Below are the different types of bullish reversal candlestick patterns:

1. Hammer:
Hammer is a single candlestick pattern that is formed at the end of a downtrend and
signals bullish reversal.

The real body of this candle is small and is located at the top with a lower shadow
which should be more than twice the real body. This candlestick chart pattern has no
or little upper shadow.

The psychology behind this candle formation is that the prices opened and sellers
pushed down the prices.

Suddenly the buyers came into the market and pushed the prices up and closed the
trading session more than the opening price.
This resulted in the formation of bullish pattern and signifies that buyers are back in
the market and downtrend may end.

Traders can enter a long position if next day a bullish candle is formed and can place
a stop-loss at the low of Hammer.
Below is an example of Hammer candlestick pattern:
2. Piercing Pattern:

Piercing pattern is multiple candlestick chart pattern that is formed after a downtrend
indicating a bullish reversal.
It is formed by two candles, the first candle being a bearish candle which indicates
the continuation of the downtrend.

The second candle is a bullish candle which opens gap down but closes more than
50% of the real body of the previous candle which shows that the bulls are back in
the market and a bullish reversal is going to take place.

Traders can enter a long position if the next day a bullish candle is formed and can

place a stop-loss at the low of the second candle.

Below is an example of a Piercing Candlestick Pattern:
3. Bullish Engulfing:
Bullish Engulfing is a multiple candlestick chart pattern that is formed after a
downtrend indicating a bullish reversal.
It is formed by two candles, the second candlestick engulfing the first candlestick.
The first candle is a bearish candle that indicates the continuation of the downtrend.

The second candlestick is a long bullish candle that completely engulfs the first
candle and shows that the bulls are back in the market.

Traders can enter a long position if next day a bullish candle is formed and can place
a stop-loss at the low of the second candle.
Below is an example of Bullish Engulfing Candlestick Pattern:
4. The Morning Star:
The Morning Star is multiple candlestick charts pattern which is formed after a
downtrend indicating bullish reversal.

It is made of 3 candlesticks, first being a bearish candle, second a Doji and the third
being a bullish candle.
The first candle shows the continuation of the downtrend, the second candle being a
doji indicates indecision in the market, and the third bullish candle shows that the
bulls are back in the market and reversal is going to take place.

The second candle should be completely out of the real bodies of the first and third
candles.

Traders can enter a long position if the next day a bullish candle is formed and can
place a stop-loss at the low of the second candle.
Below is an example of Morning Star Candlestick Charts Pattern:
5. Three White Soldiers:
The Three White Soldiers is a multiple candlestick pattern that is formed after a
downtrend indicating a bullish reversal.
These candlestick charts are made of three long bullish bodies which do not have
long shadows and are open within the real body of the previous candle in the
pattern.
6. White Marubozu:
The White Marubozu is a single candlestick pattern that is formed after a downtrend
indicating a bullish reversal.
This candlestick has a long bullish body with no upper or lower shadows which
shows that the bulls are exerting buying pressure and the markets may turn bullish.

At the formation of this candle, the sellers should be caution and close their shorting
position.
7. Three Inside Up:
The Three Inside Up is multiple candlestick pattern which is formed after a
downtrend indicating bullish reversal.

It consists of three candlesticks, the first being a long bearish candle, the second
candlestick being a small bullish candle which should be in the range the first
candlestick.

The third candlestick should be a long bullish candlestick confirming the bullish
reversal.

The relationship of the first and second candlestick should be of the bullish harami
candlestick pattern.

Traders can take a long position after the completion of this candlestick pattern.
8. Bullish Harami:
The Bullish Harami is multiple candlestick chart pattern which is formed after a
downtrend indicating bullish reversal.
It consists of two candlestick charts, the first candlestick being a tall bearish candle
and second being a small bullish candle which should be in the range of the first
candlestick.

The first bearish candle shows the continuation of the bearish trend and the second
candle shows that the bulls are back in the market.

Traders can take a long position after the completion of this candlestick pattern.
9. Tweezer Bottom:
The Tweezer Bottom candlestick pattern is a bullish reversal candlestick pattern that
is formed at the end of the downtrend.

It consists of two candlesticks, the first one being bearish and the second one being
bullish candlestick.

Both the candlesticks make almost or the same low.When the Tweezer Bottom
candlestick pattern is formed the prior trend is a downtrend.
A bearish tweezer candlestick is formed which looks like the continuation of the
ongoing downtrend. On the next day, the second day’s bullish candle’s low indicates
a support level.

The bottom-most candles with almost the same low indicate the strength of the
support and also signal that the downtrend may get reversed to form an uptrend.
Due to this the bulls step into action and move the price upwards.

This bullish reversal is confirmed the next day when the bullish candle is formed.
10. Inverted Hammer:
An Inverted Hammer is formed at the end of the downtrend and gives a bullish
reversal signal.
In this candlestick, the real body is located at the end and there is a long upper
shadow. It is the inverse of the Hammer Candlestick pattern.

This pattern is formed when the opening and closing prices are near to each other
and the upper shadow should be more than twice the real body.
11. Three Outside Up:
The Three Outside Up is multiple candlestick pattern which is formed after a
downtrend indicating bullish reversal.

It consists of three candlesticks, the first being a short bearish candle, the second
candlestick being a large bullish candle which should cover the first candlestick.

The third candlestick should be a long bullish candlestick confirming the bullish
reversal.

The relationship of the first and second candlestick chart should be of the Bullish
Engulfing candlestick pattern.

Traders can take a long position after the completion of this candlestick pattern.
12. On-Neck Pattern:
The on neck pattern occurs after a downtrend when a long real bodied bearish
candle is followed by a smaller real bodied bullish candle which gaps down on the
open but then closes near the prior candle’s close.

The pattern is called a neckline because the two closing prices are the same or
almost the same across the two candles, forming a horizontal neckline.
 13. Bullish Counterattack-
The bullish counterattack pattern is a bullish reversal pattern that predicts the
upcoming reversal of the current downtrend in the market. This candlestick pattern is
a two-bar pattern that appears during a downtrend in the market. A pattern needs to
meet the following conditions to be a bullish counterattack pattern.

 There must be a strong downtrend in the market for the formation of

the bullish counterattack pattern.

 The first candle must be a long black candle with a real body.

 The second candle must also be a long (ideally, equal in size to the
first candle) but a white candle with a real body. The second candle
must close near the close of the first candle.
Bearish Candlestick Pattern:
Bearish Reversal candlestick patterns indicate that the ongoing uptrend is going to
reverse to a downtrend.

Thus, the traders should be cautious about their long positions when the bearish
reversal candlestick patterns are formed.

Below are the different types of bearish reversal candlestick chart patterns:

14. Hanging man:

Hanging Man is a single candlestick pattern which is formed at the end of
an uptrend and signals bearish reversal.

The real body of this candle is small and is located at the top with a lower
shadow which should be more than the twice of the real body. This
candlestick pattern has no or little upper shadow.

The psychology behind this candle formation is that the prices opened and
seller pushed down the prices.

Suddenly the buyers came into the market and pushed the prices up but
were unsuccessful in doing so as the prices closed below the opening
price.
This resulted in the formation of bearish pattern and signifies that seller are back in
the market and uptrend may end.

Traders can enter a short position if next day a bearish candle is formed and can
place a stop-loss at the high of Hanging Man.
Below is an example of Hanging Man Candlestick Pattern:
15. Dark cloud cover:
Dark Cloud Cover is multiple candlestick pattern which is formed after the uptrend
indicating bearish reversal.
It is formed by two candles, the first candle being a bullish candle which indicates the
continuation of the uptrend.

The second candle is a bearish candle which opens gap up but closes more than
50% of the real body of the previous candle which shows that the bears are back in
the market and bearish reversal is going to take place.

Traders can enter a short position if the next day a bearish candle is formed and can
place a stop-loss at the high of the second candle.
Below is an example of a Dark Cloud candlestick pattern;
16. Bearish Engulfing:
Bearish Engulfing is a multiple candlestick pattern that is formed after an uptrend
indicating a bearish reversal.

It is formed by two candles, the second candlestick engulfing the first candlestick.
The first candle being a bullish candle indicates the continuation of the uptrend.

The second candlestick chart is a long bearish candle that completely engulfs the
first candle and shows that the bears are back in the market.

Traders can enter a short position if next day a bearish candle is formed and can
place a stop-loss at the high of the second candle.
17. The Evening Star:
The Evening Star is multiple candlestick pattern which is formed after the uptrend
indicating bearish reversal.

It is made of 3 candlesticks, first being a bullish candle, second a doji and third being
a bearish candle.

The first candle shows the continuation of the uptrend, the second candle being a
doji indicates indecision in the market, and the third bearish candle shows that the
bears are back in the market and reversal is going to take place.

The second candle should be completely out of the real bodies of first and third
candle.

Traders can enter a long position if next day a bearish candle is formed and can
place a stop-loss at the high of the second candle.
Below is an example of Evening Star Candlestick Pattern:
18. Three Black Crows:
The Three Black Crows is multiple candlestick pattern which is formed after an
uptrend indicating bearish reversal.
These candlesticks are made of three long bearish bodies which do not have long
shadows and open within the real body of the previous candle in the pattern.
19. Black Marubozu:
The Black Marubozu is a single candlestick pattern which is formed after an uptrend
indicating bearish reversal.

This candlestick chart has a long bearish body with no upper or lower shadows
which shows that the bears are exerting selling pressure and the markets may turn
bearish.

At the formation of this candle, the buyers should be caution and close their buying
position.
20. Three Inside Down:
The Three Inside Down is multiple candlestick pattern which is formed after an
uptrend indicating bearish reversal.

It consists of three candlesticks, the first being a long bullish candle, the second
candlestick being a small bearish which should be in the range the first candlestick.

The third candlestick chart should be a long bearish candlestick confirming the
bearish reversal.

The relationship of the first and second candlestick should be of the bearish Harami
candlestick pattern.

Traders can take a short position after the completion of this candlestick pattern.
21. Bearish Harami:
The Bearish Harami is multiple candlestick pattern which is formed after the uptrend
indicating bearish reversal.

It consists of two candlesticks, the first candlestick being a tall bullish candle and
second being a small bearish candle which should be in the range of the first
candlestick chart.

The first bullish candle shows the continuation of the bullish trend and the second
candle shows that the bears are back in the market.

Traders can take a short position after the completion of this candlestick pattern.
22. Shooting Star:
Shooting Star is formed at the end of the uptrend and gives bearish reversal signal.
In this candlestick chart the real body is located at the end and there is long upper
shadow. It is the inverse of the Hanging Man Candlestick pattern.

This pattern is formed when the opening and closing prices are near to each other
and the upper shadow should be more than the twice of the real body.
23. Tweezer Top:
The Tweezer Top pattern is a bearish reversal candlestick pattern that is formed at
the end of an uptrend.

It consists of two candlesticks, the first one being bullish and the second one being
bearish candlestick. Both the tweezer candlestick make almost or the same high.

When the Tweezer Top candlestick pattern is formed the prior trend is an uptrend. A
bullish candlestick is formed which looks like the continuation of the ongoing uptrend.
On the next day, the high of the second day’s bearish candle’s high indicates a
resistance level. Bulls seem to raise the price upward, but now they are not willing to
buy at higher prices.

The top-most candles with almost the same high indicate the strength of the
resistance and also signal that the uptrend may get reversed to form a downtrend.
This bearish reversal is confirmed on the next day when the bearish candle is
formed.
24. Three Outside Down:
The Three Outside Down is multiple candlestick pattern which is formed after an
uptrend indicating bearish reversal.

It consists of three candlesticks, the first being a short bullish candle, the second
candlestick being a large bearish candle which should cover the first candlestick.

The third candlestick should be a long bearish candlestick confirming the bearish
reversal.

The relationship of the first and second candlestick should be of the Bearish
Engulfing candlestick pattern.
Traders can take a short position after the completion of this candlestick pattern.
25. Bearish Counterattack–
The bearish counterattack candlestick pattern is a bearish reversal pattern that
appears during an uptrend in the market. It predicts that the current uptrend in the
market will make and the new downtrend will take over the market.
Continuation Candlestick Patterns:

26. Doji:
Doji pattern is a candlestick pattern of indecision which is formed when the opening
and closing prices are almost equal.
It is formed when both the bulls and bears are fighting to control prices but nobody
succeeds in gaining full control of the prices.

The candlestick pattern looks like a cross with very small real body and long
shadows.
27. Spinning Top:
The spinning top candlestick pattern is same as the Doji indicating indecision in the
market.

The only difference between spinning top and doji is in their formation, the real body
of the spinning is larger as compared to Doji.
28. Falling Three Methods:
The “falling three methods” is a bearish, five candle continuation pattern which
signals an interruption, but not a reversal, of the ongoing downtrend.

The candlestick pattern is made of two long candlestick charts in the direction of the
trend i.e downtrend at the beginning and end, with three shorter counter-trend
candlesticks in the middle.

The candlestick pattern is important as it shows traders that the bulls still do not have
enough power to reverse the trend.
29. Rising Three Methods:
The “rising three methods” is a bullish, five candle continuation pattern which signals
an interruption, but not a reversal, of the ongoing uptrend.

The candlestick pattern is made of two long candlesticks in the direction of the trend
i.e uptrend in this case. at the beginning and end, with three shorter counter-trend
candlesticks in the middle.

The candlestick pattern is important as it shows traders that the bears still do not
have enough power to reverse the trend.
30. Upside Tasuki Gap:
It is a bullish continuation candlestick pattern which is formed in an ongoing uptrend.

This candlestick pattern consists of three candles, the first candlestick is a long-
bodied bullish candlestick, and the second candlestick is also a bullish candlestick
chart formed after a gap up.

The third candlestick is a bearish candle that closes in the gap formed between
these first two bullish candles.
31. Downside Tasuki Gap:
It is a bearish continuation candlestick pattern which is formed in an ongoing
downtrend.

This candlestick pattern consists of three candles, the first candlestick is a long-
bodied bearish candlestick, and the second candlestick is also a bearish candlestick
formed after a gap down.

The third candlestick is a bullish candle that closes in the gap formed between these
first two bearish candles.
32. Mat-Hold-
A mat hold pattern is a candlestick formation indicating the continuation of a prior
trend.

There can be either bearish or bullish mat hold patterns. A bullish pattern begins with
a large bullish candle followed by a gap higher and three smaller candles which
move lower.

These candles must stay above the low of the first candle. The fifth candle is a large
candle that moves to the upside again. The pattern occurs within an overall uptrend.
33. Rising Window-
The rising window is a candlestick pattern consisting of two bullish candlesticks
with a gap between them. The gap is a space between the high and low of two
candlesticks that occurs due to high trading volatility. It is a trend continuation
candlestick pattern indicating strong strength of buyers in the market.

34. Falling Window-

The falling window is a candlestick pattern that consists of two bearish
candlesticks with a gap between them. The gap is a space between the high and low
of two candlesticks. it occurs due to high trading volatility. It is a trend continuation
candlestick pattern and it is an indication of the strong strength of sellers in the
market.

35. High Wave-

The high wave candlestick pattern is an indecision pattern that shows the market is
neither bullish nor bearish. It mostly occurs at support and resistance levels. This is
where bears and bulls battle each other in the effort of trying to push the price in a
given direction. Candlesticks depict the pattern with long lower shadows and long
upper wicks. Likewise, they have small bodies. The long wicks signal there was a
large amount of price movement during the given period. However, the price
ultimately ended up closing near the opening price.

Bottomline:
One should remember that the candlestick patterns that we have discussed above
should always be used with other technical indicators as sometimes the signals
generated by these patterns can be false.