Candlestick pattern - Wikipedia https://en.wikipedia.

org/wiki/Candlestick_pattern

Candlestick pattern
In technical analysis, a candlestick pattern is a movement in prices shown graphically on a candlestick
chart that some believe can predict a particular market movement. The recognition of the pattern is
subjective and programs that are used for charting have to rely on predefined rules to match the pattern.
There are 42 recognised patterns that can be split into simple and complex patterns.

Contents
History
Formation of candlestick
Simple patterns
Complex patterns
See also
Further reading
References
External links

History
Some of the earliest technical trading analysis was used to track prices of rice in the 18th century. Much of
the credit for candlestick charting goes to Munehisa Homma (1724–1803), a rice merchant from Sakata,
Japan who traded in the Ojima Rice market in Osaka during the Tokugawa Shogunate. According to Steve
Nison, however, candlestick charting came later, probably beginning after 1850.[1]

Formation of candlestick
Candlesticks are graphical representations of price movements
for a given period of time. They are commonly formed by the
opening, high, low, and closing prices of a financial instrument.

If the opening price is above the closing price then a filled

(normally red or black) candlestick is drawn.

If the closing price is above the opening price, then normally a

green or a hollow candlestick (white with black outline) is The aspects of a candlestick pattern
shown.

The filled or hollow portion of the candle is known as the body or real body, and can be long, normal, or
short depending on its proportion to the lines above or below it.

The lines above and below, known as shadows, tails, or wicks represent the high and low price ranges
within a specified time period. However, not all candlesticks have shadows.

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Simple patterns
Big Black Candle Has an
unusually long black body
with a wide range between
high and low. Prices open
near the high and close
near the low. Considered a
bearish pattern.
Black Body Formed when
the opening price is higher
than the closing price.
Considered to be a bearish
signal.
Dragonfly Doji Formed
when the opening and the
closing prices are at the
highest of the day. If it has
a longer lower shadow it
signals a more bullish
trend. When appearing at
market bottoms it is
considered to be a reversal
signal.
Long-Legged Doji
Consists of a Doji with very
long upper and lower
shadows. Indicates strong
forces balanced in
opposition.
Hammer A black or a white
candlestick that consists of
a small body near the high
with a little or no upper
shadow and a long lower
tail. Considered a bullish
pattern during a downtrend.
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Big White Candle Has an
unusually long white body
with a wide range between
high and low of the day.
Prices open near the low and
close near the high.
Considered a bullish pattern.
Doji Formed when opening
and closing prices are virtually
the same. The lengths of
shadows can vary.
Gravestone Doji Formed
when the opening and closing
prices are at the lowest of the
day. If it has a longer upper
shadow it signals a bearish
trend. When it appears at
market top it is considered a
reversal signal.
Hanging Man A black or a
white candlestick that
consists of a small body near
the high with a little or no
upper shadow and a long
lower tail. The lower tail
should be two or three times
the height of the body.
Considered a bearish pattern
during an uptrend.
Inverted Black Hammer A
black body in an upside-down
hammer position. Usually
considered a bottom reversal
signal.
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Inverted Hammer A black
or a white candlestick in an
upside-down hammer
position.
Long Upper Shadow A
black or a white candlestick
with an upper shadow that
has a length of 2/3 or more
of the total range of the
candlestick. Normally
considered a bearish signal
when it appears around
price resistance levels.
Shooting Star A black or a
white candlestick that has a
small body, a long upper
shadow and a little or no
lower tail. Considered a
bearish pattern in an
uptrend.
White Body Formed when
the closing price is higher
than the opening price and
considered a bullish signal.
Shaven Head A black or a
white candlestick with no
upper shadow. [Compared
with hammer.]
Complex patterns
Bearish Harami Consists of
an unusually large white
body followed by a small
black body (contained within
large white body). It is
considered as a bearish
pattern when preceded by
an uptrend.
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Long Lower Shadow A black
or a white candlestick is
formed with a lower tail that
has a length of 2/3 or more of
the total range of the
candlestick. Normally
considered a bullish signal
when it appears around price
support levels.
Marubozu A long or a normal
candlestick (black or white)
with no shadow or tail. The
high and the lows represent
the opening and the closing
prices. Considered a
continuation pattern.
Spinning Top A black or a
white candlestick with a small
body. The size of shadows
can vary. Interpreted as a
neutral pattern but gains
importance when it is part of
other formations.
Shaven Bottom A black or a
white candlestick with no
lower tail. [Compare with
Inverted Hammer.]
Bearish Harami Cross A
large white body followed by
a Doji. Considered as a
reversal signal when it
appears at the top.
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Bullish 3-Method
Bearish 3-Method
Formation Consists of a
Formation A long black
long white body followed by
body followed by three small
three small bodies (normally
bodies (normally white) and
black) and a long white
a long black body. The three
body. The three black bodies
white bodies are contained
are contained within the
within the range of first black
range of first white body.
body. This is considered as a
This is considered as a
bearish continuation pattern.
bullish continuation pattern.
 
Bullish Harami Consists of
an unusually large black
Bullish Harami Cross A
body followed by a small
large black body followed by
white body (contained within
a Doji. It is considered as a
large black body). It is
reversal signal when it
considered as a bullish
appears at the bottom.
pattern when preceded by a
downtrend.
 
Dark Cloud Cover Consists
of a long white candlestick
Engulfing Bearish Line
followed by a black
Consists of a small white
candlestick that opens above
body that is contained within
the high of the white
the followed large black
candlestick and closes well
candlestick. When it appears
into the body of the white
at top it is considered as a
candlestick. It is considered
major reversal signal.
as a bearish reversal signal
during an uptrend.
 
Evening Doji Star Consists
of three candlesticks. First is
a large white body
candlestick followed by a
Doji that gap above the
Engulfing Bullish Consists
white body. The third
of a small black body that is
candlestick is a black body
contained within the followed
that closes well into the
large white candlestick.
white body. When it appears
When it appears at bottom it
at the top it is considered as
is interpreted as a major
a reversal signal. It signals
reversal signal.
more bearish trend than the
evening star pattern
because of the doji that has
appeared between the two
bodies.
 

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Evening Star Consists of a

large white body candlestick
Falling Window A window
followed by a small body
(gap) is created when the
candlestick (black or white)
high of the second
that gaps above the
candlestick is below the low
previous. The third is a black
of the preceding candlestick.
body candlestick that closes
It is considered that the
well within the large white
window should be filled with
body. It is considered as a
a probable resistance.
reversal signal when it
appears at top level.
 
Morning Doji Star Consists
of a large black body
Morning Star Consists of a
candlestick followed by a
large black body candlestick
Doji that occurred below the
followed by a small body
preceding candlestick. On
(black or white) that
the following day, a third
occurred below the large
white body candlestick is
black body candlestick. On
formed that closed well into
the following day, a third
the black body candlestick
white body candlestick is
which appeared before the
formed that closed well into
Doji. It is considered as a
the black body candlestick. It
major reversal signal that is
is considered as a major
more bullish than the regular
reversal signal when it
morning star pattern
appears at bottom.
because of the existence of
the Doji.
 
On Neckline In a
downtrend, Consists of a Three Black Crows
black candlestick followed by Consists of three long black
a small body white candlesticks with
candlestick with its close consecutively lower closes.
near the low of the preceding The closing prices are near
black candlestick. It is to or at their lows. When it
considered as a bearish appears at top it is
pattern when the low of the considered as a top reversal
white candlestick is signal.
penetrated.
 
Tweezer Bottoms Consists
Three White Soldiers of two or more candlesticks
Consists of three long white with matching bottoms. The
candlesticks with candlesticks may or may not
consecutively higher closes. be consecutive and the
The closing prices are near sizes or the colours can
to or at their highs. When it vary. It is considered as a
appears at bottom it is minor reversal signal that
interpreted as a bottom becomes more important
reversal signal. when the candlesticks form
another pattern.
 

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Tweezer Tops Consists of

two or more candlesticks
with matching tops. The Doji Star Consists of a black
candlesticks may or may not or a white candlestick
be consecutive and the sizes followed by a Doji that gap
or the colours can vary. It is above or below these. It is
considered as a minor considered as a reversal
reversal signal that becomes signal with confirmation
more important when the during the next trading day.
candlesticks form another
pattern.
 
Piercing Line Consists of a Rising Window A window
black candlestick followed by (gap) is created when the
a white candlestick that low of the second
opens lower than the low of candlestick is above the high
preceding but closes more of the preceding candlestick.
than halfway into black body It is considered that the
candlestick. It is considered window should provide
as reversal signal when it support to the selling
appears at bottom. pressure.

See also
Acquisitions, mergers, and takeovers terminology
The Island Reversal

Further reading
Lebeau, Charles (1991). Technical Traders Guide to Computer Analysis of the Futures Markets
(https://www.amazon.com/Technical-Traders-Computer-Analysis-Futures/dp/1556234686
/ref=sr_1_1?s=books&ie=UTF8&qid=1326806415&sr=1-1).

References
1. "Introduction to Candlesticks" (http://stockcharts.com/school
/doku.php?id=chart_school:chart_analysis:introduction_to_candlesticks). StockCharts.
Stockcharts.com. Retrieved 29 June 2016.

External links
Bulkowski's Stock Market Patterns. On line, includes research, statistical validation, and follow-on
results. (http://thepatternsite.com/studies.html)
66 common candlestick patterns (https://www.hotcandlestick.com/candles.htm) at hotcandlestick.com

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