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Candlestick patterns

Bullish and bearish candlesticks:the common patterns, in one place.

A bullish candle closes above its open and a bearish candle closes below it. Candlestick patterns combine one to three candles into named shapes - such as the engulfing, harami, morning star and three white soldiers - that traders read as signs of buying or selling pressure. Each has a bearish mirror, and none predicts price on its own.

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Bullish and bearish candles

Candlestick charts, developed in Japan, draw each period as a body between the open and close, with wicks to the high and low. A bullish candle closes higher than it opened; a bearish candle closes lower. A candle with a large body and small wicks - a marubozu - shows one side in control for the whole period; a small body with long wicks shows a contest.

The common patterns

Most named patterns are built from one to three candles and come in bullish and bearish pairs.

Common candlestick patterns and their mirrors
CandlesBullish formBearish formWhat it describes
1HammerShooting starA move rejected within the period - see the pin bar
1Bullish marubozuBearish marubozuOne side in control all period
2Bullish engulfingBearish engulfingA body that fully covers the prior opposite body
2Bullish haramiBearish haramiA small body inside the prior large opposite body
3Morning starEvening starA large move, a small indecisive candle, then a large move back
3Three white soldiersThree black crowsThree strong candles in the same direction

Why context matters more than the pattern

A bullish engulfing in the middle of a range is common and uninformative; the same candles after a decline into support are read very differently. Most traders treat a candlestick pattern as a trigger at a location they had already chosen, not as a reason to trade by itself. The doji, pin bar and inside bar pages cover the single- and two-candle shapes in more depth.

Step by step

How to identify it

Name a pattern only when every candle in it meets the definition.

  1. Decide on precise definitions - for example, whether an engulfing must cover the prior body or its full range.
  2. Check the trend or move before the pattern, since most are defined as reversals of it.
  3. Check the location: a level, the edge of a range or the end of a sharp move.
  4. Wait for the next candle before treating the pattern as confirmed, if your rules require it.

Worked example

The concept,walked through

A bullish engulfing at support, described

An illustrative sequence in words, with round numbers standing in for price. It is not taken from any real instrument or date.

  1. 1. DeclinePrice falls into a support zone near 100 over several sessions.
  2. 2. PatternA bearish candle from 102 to 100.5 is followed by a bullish candle from 100.2 to 102.8, whose body covers the prior body.
  3. 3. PlanA trader using the pattern would consider a long above 102.8, with a stop below the pattern's low.

The engulfing showed buyers overwhelming one session's selling at a chosen level. It did not show the next session's direction.

Common mistakes

Where tradersgo wrong

Learning names instead of logic

Every pattern describes who controlled the period. Reading that directly is more useful than memorising dozens of names.

Ignoring the timeframe

A pattern on a five-minute chart and on a daily chart describe very different amounts of trading.

Trading patterns without a stop

Each pattern has a point where it is wrong - usually beyond its extreme.

Limitations

What it cannottell you

No chart concept predicts price. These are the limits worth keeping in view.

  • Candlestick definitions vary between sources, which changes which patterns appear on a chart.
  • There is no reliable evidence that candlestick patterns alone predict price; published tests are for particular markets and periods.

In an evaluation

Using it on asimulated account

On a $100,000 simulated account the daily loss limit is $3,000 on Instant or $5,000 on 1 Step and 2 Step. Pattern stops are often wide, so size from the stop distance first - risking something like $500 a trade - rather than from how clean the pattern looks.

Trading rule

What is the daily loss limit?

The ceiling on a day's losses - 3% on Instant and 5% on 1 Step and 2 Step.

Trading rule

When can I trade?

Session boundaries on your account shape how candles are drawn.

Trading rule

What is maximum drawdown?

The overall floor beneath the account.

Questions

Asked aboutthis concept

A candle that closes above its open, usually drawn green or white. A bearish candle closes below its open, usually drawn red or black.

The shooting star, bearish engulfing, bearish harami, evening star and three black crows. Each is the mirror of a bullish pattern.

Keep learning

Relatedlessons

Chart and candlestick patterns

Doji Candle: Meaning and Types

The candle with almost no body - what it shows about the session, the common types, and why a doji on its own says very little.

Chart and candlestick patterns

Pin Bar Candle: Bullish and Bearish

The long-wicked candle that shows price reaching a level and being rejected - bullish and bearish forms, where they matter, and why most are noise.

Chart and candlestick patterns

Inside Bar Candlestick Pattern

A candle that stays entirely within the previous candle's high and low - what the contraction shows, how breaks are traded, and why many fail.

Chart and candlestick patterns

Reversal Chart Patterns, Explained

The chart patterns traders read as a possible end to a trend - how they compare, what each needs to confirm it, and why most candidates fail.

Sources

What this pagerelied on

  1. Candlestick pattern - Wikipedia. Retrieved 22 September 2026. Candlestick construction, the pattern names, and the Japanese origin of the charting method.
  2. Morning star (candlestick pattern) - Wikipedia. Retrieved 23 September 2026. The three-candle morning star construction.
  3. Three white soldiers - Wikipedia. Retrieved 23 September 2026. The three white soldiers and its bearish mirror, three black crows.

Educational content only, not investment advice or a recommendation to trade. Chart concepts describe what price has done; none of them predicts what it will do, and trading any strategy can lose money. Get Funded Now accounts are simulated and trade virtual funds. Last reviewed 22 September 2026.

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