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Candlestick patterns

Single and double candle formations, each with an animated sketch, what usually happens afterwards, where they mislead you, and a worked example. A single candle is rarely a signal on its own, the trend before it and the confirmation after it matter more.

Read the lesson what chart patterns can do first. It explains why patterns look more convincing in hindsight than they are.

Bullish reversal patterns

Sit at the end of a downtrend and hint that buyers are gaining the upper hand.

HammerSmall body on top, long lower shadow, needs confirmation.Bullish engulfingTwo candles, the second fully covering the first.

Bearish reversal patterns

Sit at the end of an uptrend and hint that sellers are gaining the upper hand.

Shooting starSmall body at the bottom, long upper shadow, the mirror image of the hammer.Bearish engulfingTwo candles, the second falling and fully covering the first.

Indecision

Show a standoff between buyers and sellers, no direction of its own.

DojiOpen and close almost equal, the body is tiny.

All sketches use made up prices. The examples include fees, spread and also the case where the pattern doesn't work out. They're not a recommendation.