Often Used Candlestick Patterns
September 22, 2026
Candlestick patterns are recognizable formations on a chart that help traders anticipate what may come next. This guide covers the most commonly used bullish and bearish patterns — each with a clear description and an illustration of how it forms.
Introduction
Candlestick patterns are groupings of one to five candles that, taken together, suggest how buyers and sellers are likely to behave next. They fall into two broad families: reversal patterns, which signal a trend may be about to flip, and continuation patterns, which signal a brief pause before the existing trend resumes.
The patterns below are split into bullish (favouring higher prices) and bearish (favouring lower prices). Each entry describes the candle structure, the market psychology behind it, and practical tips for trading it. No single pattern is a guarantee — always look for confirmation from volume, support/resistance, or technical indicators.
Bullish Candlestick Patterns
Bullish patterns suggest that buyers are gaining control and prices may rise. They are most powerful when they appear at the end of a downtrend or at a support level.
Two candles. The first is a small red (bearish) candle. The second is a large green (bullish) candle whose body completely covers — engulfs — the body of the first candle.
Psychology
The pattern shows a sudden shift in momentum. Sellers appeared in control during the first candle, but buyers flood in on the second candle with enough force to push price well above the prior open. The larger the second body relative to the first, the stronger the reversal signal.
- Most reliable at the bottom of a downtrend or at a known support level.
- The second candle should close near its high — weak closes weaken the signal.
- Confirm with rising volume on the engulfing candle.
Two candles. The first is a large red candle. The second is a small green candle whose body sits entirely within the body of the first candle.
Psychology
After a strong down move, the small second candle reveals that sellers have lost momentum and buyers are beginning to test the waters. It is a warning of a potential reversal rather than an aggressive buy signal — traders wait for confirmation on the following candles.
- Look for it after an extended downtrend, not in the middle of a range.
- Treat it as a setup; confirm with a breakout above the first candle's high.
- The smaller the second candle, the more meaningful the indecision.
Three candles. The first is a large red candle. The second is a small candle (often a doji) that gaps lower, showing indecision. The third is a large green candle that closes well into the body of the first candle.
Psychology
The morning star tells a three-part story: sellers dominate, then exhaustion and indecision set in, and finally buyers take control and reclaim ground. The third candle's close above the midpoint of the first candle is the key confirmation of the reversal.
- The third candle should close above the midpoint of the first candle's body.
- Higher volume on the third candle adds conviction.
- Best traded at support or after a clear downtrend.
Five candles. The first is a large green candle in an uptrend. The next three are small red candles that stay within the range of the first. The fifth is another large green candle that closes at a new high.
Psychology
This is a continuation pattern, not a reversal. The three small red candles represent a healthy, low-volume pullback — profit-taking — within an established uptrend. The fifth candle confirms that buyers remain in control and the uptrend is resuming.
- The three small candles should stay fully within the first candle's high-low range.
- Volume on the pullback candles should be lighter than on the trend candles.
- Enter on a break above the fifth candle or the first candle's high.
Two candles. The first is a large red candle. The second is a doji (open and close are nearly equal) whose body sits within the body of the first candle.
Psychology
The doji represents pure indecision — buyers and sellers reached equilibrium after a strong down move. Because the doji is contained within the prior large body, it signals that the prior trend has lost its power. The harami cross is generally considered a stronger reversal hint than the standard harami because of the doji's neutrality.
- Confirmation is essential — wait for a green candle to close above the doji's high.
- More potent after a long, extended downtrend.
- Watch for a volume spike on the doji to gauge true indecision.
Bearish Candlestick Patterns
Bearish patterns suggest that sellers are gaining control and prices may fall. They are most powerful when they appear at the end of an uptrend or at a resistance level.
Two candles. The first is a small green (bullish) candle. The second is a large red (bearish) candle whose body completely covers — engulfs — the body of the first candle.
Psychology
Buyers appeared in control during the first candle, but sellers flood in on the second candle with enough force to push price well below the prior open. The larger the second body relative to the first, the stronger the bearish reversal signal.
- Most reliable at the top of an uptrend or at a known resistance level.
- The second candle should close near its low — weak closes weaken the signal.
- Confirm with rising volume on the engulfing candle.
Three candles. The first is a large green candle. The second is a small candle (often a doji) that gaps higher, showing indecision. The third is a large red candle that closes well into the body of the first candle.
Psychology
The evening star mirrors the morning star in reverse: buyers dominate, then exhaustion and indecision set in, and finally sellers take control and reclaim ground. The third candle's close below the midpoint of the first candle is the key confirmation of the reversal.
- The third candle should close below the midpoint of the first candle's body.
- Higher volume on the third candle adds conviction.
- Best traded at resistance or after a clear uptrend.
Two candles. The first is a large green candle. The second is a small red candle whose body sits entirely within the body of the first candle.
Psychology
After a strong up move, the small second candle reveals that buyers have lost momentum and sellers are beginning to test the waters. It is a warning of a potential reversal rather than an aggressive sell signal — traders wait for confirmation on the following candles.
- Look for it after an extended uptrend, not in the middle of a range.
- Treat it as a setup; confirm with a breakdown below the first candle's low.
- The smaller the second candle, the more meaningful the indecision.
Five candles. The first is a large red candle in a downtrend. The next three are small green candles that stay within the range of the first. The fifth is another large red candle that closes at a new low.
Psychology
This is a continuation pattern, not a reversal. The three small green candles represent a healthy, low-volume pullback — short-covering or bargain hunting — within an established downtrend. The fifth candle confirms that sellers remain in control and the downtrend is resuming.
- The three small candles should stay fully within the first candle's high-low range.
- Volume on the bounce candles should be lighter than on the trend candles.
- Enter on a break below the fifth candle or the first candle's low.
Two candles. The first is a large green candle. The second is a doji (open and close are nearly equal) whose body sits within the body of the first candle.
Psychology
The doji represents pure indecision — buyers and sellers reached equilibrium after a strong up move. Because the doji is contained within the prior large body, it signals that the prior trend has lost its power. The harami cross is generally considered a stronger reversal hint than the standard harami because of the doji's neutrality.
- Confirmation is essential — wait for a red candle to close below the doji's low.
- More potent after a long, extended uptrend.
- Watch for a volume spike on the doji to gauge true indecision.