Technical Analysis Tutorial: Candlestick Compendium!
This is a quick summary of important candlestick patterns. It’s presumed that you know the basics of candles: if you don’t, see the article links in our Members Area.
Without further ado, let’s begin.
1. Bullish Marabuzo
Number of candles: 1.
Description: long green candle which opens near its low, and closes near its high.
Implications: BULLISH.
2. Bearish Marabuzo
Number of candles: 1.
Description: long red candle which opens near its high, and closes near its close.
Implications: BEARISH.
3. Doji
Number of candles: 1.
Description: candle which closes near where it opened.
Implications: REVERSAL.
4. Shooting Star
Number of candles: 1.
Description: candle which closes near where it opened, at the bottom of the period’s range.
Implications: BEARISH REVERSAL (in an uptrend).
5. Hammer
Number of candles: 1.
Description: candle which closes near where it opened, at the top of the period’s range.
Implications: BULLISH REVERSAL (in a downtrend).
6. Hanging Man
Number of candles: 1.
Description: candle which closes near where it opened, at the top of the period’s range.
Implications: BEARISH REVERSAL (in an uptrend) (only weak effectiveness)
7. Inverted Hammer
Number of candles: 1.
Description: candle which closes near where it opened, at the bottom of the period’s range.
Implications: BULLISH REVERSAL (in a downtrend) (only weak effectiveness)
8. Bullish Engulfing Pattern
Number of candles: 2.
Description: green candle with a lower open and a higher close than the previous candle.
Implications: BULLISH REVERSAL (in a downtrend)
9. Bearish Engulfing Pattern
Number of candles: 2.
Description: red candle with a higher open and a lower close than the previous candle.
Implications: BEARISH REVERSAL (in an uptrend)
10. Harami
Number of candles: 2.
Description: candle with a real body contained within the range of the prior real body (which must have moved in the direction of the prior trend).
Implications: REVERSAL (only weak effectiveness)
11. Dark Cloud Cover
Number of candles: 2.
Description: red candle with a higher open than the previous candle, but a close in the bottom half of that prior candle.
Implications: BEARISH REVERSAL (in an uptrend)
12. Piercing Pattern
Number of candles: 2.
Description: green candle with a lower open than the previous candle, but a close in the top half of that prior candle.
Implications: BULLISH REVERSAL (in a downtrend)
13. Morning Star
Number of candles: 3.
Description: long red candle followed by a small-bodied candle which gaps lower. The third candle closes in the top half of the first candle.
Implications: BULLISH REVERSAL (in a downtrend)
14. Evening Star
Number of candles: 3.
Description: long green candle followed by a small-bodied candle which gaps higher. The third candle closes in the bottom half of the first candle.
Implications: BEARISH REVERSAL (in a downtrend)
Graham Neary MSTA (graham@futurestechs.co.uk)
Tags: bearish engulfing pattern, bullish engulfing pattern, Candlestick analysis, Candlestick charts, chart analysis, chart patterns, dark cloud cover, doji, evening star, FTSE trading, Hammer, hanging man, harami pattern, inverted hammer, marabuzo candle, marubozu candle, morning star, piercing pattern, Shooting Star, spread betting, technical analysis