Candlestick Patterns Cheat Sheet — 20 Patterns Every Trader Must Know 2026

Candlestick Basics — Reading the Language of Price

Candlestick charts originated in 18th century Japan, developed by rice traders to track market prices. When Steve Nison introduced them to Western traders in the 1990s, it revolutionized technical analysis. I adopted candlestick analysis in 1998, just a year into my trading career, and it immediately improved my ability to read market sentiment.

Each candlestick tells a story of the battle between buyers and sellers during a specific time period. The body shows where price opened and closed. The wicks (shadows) show the extremes — how far buyers pushed price up and how far sellers pushed it down.

Anatomy of a Candlestick

• Open — The first price when the candle's time period begins
• Close — The last price when the period ends
• High — The highest price reached during the period
• Low — The lowest price reached during the period
• Body — The filled area between open and close. Green/white = close > open (bullish). Red/black = close < open (bearish)
• Upper wick — Line above the body, showing the high relative to the body
• Lower wick — Line below the body, showing the low relative to the body

What the Body and Wicks Tell You

Single-Candle Patterns (5 Patterns)

1. Pin Bar (Hammer / Shooting Star)

The most important single-candle pattern. A pin bar has a long wick (at least 2/3 of total candle range) and a small body at one end.

• Bullish Pin Bar (Hammer) — Long lower wick, small body at top. Found at support. Signals buying rejection of lower prices.
• Bearish Pin Bar (Shooting Star) — Long upper wick, small body at bottom. Found at resistance. Signals selling rejection of higher prices.
• Entry: On pin bar close, or 50% retracement of the wick
• Stop Loss: Beyond the wick + 5-10 pip buffer
• Reliability: 65-70% at key levels

2. Doji

Open and close are virtually identical, creating a cross or plus shape. Represents complete indecision. At key levels, dojis often precede reversals.

• Standard Doji — Equal upper and lower wicks
• Dragonfly Doji — Long lower wick, no upper wick (bullish at support)
• Gravestone Doji — Long upper wick, no lower wick (bearish at resistance)
• Reliability: 55-60% (best used as confirmation, not standalone signal)

3. Marubozu

A candle with no wicks (or very tiny wicks) — pure momentum. A green marubozu opened at its low and closed at its high. Shows complete buyer dominance. Often appears as the first candle of a strong trend move.

4. Spinning Top

Small body with equal upper and lower wicks. Similar to doji but with a visible body. Signals indecision and potential trend exhaustion. Most useful after a strong trend move.

5. Inverted Hammer

Long upper wick, small body at the bottom, found at support level during a downtrend. Despite looking bearish, it is actually a potential reversal signal because it shows buyers are starting to fight back. Requires next-candle confirmation (bullish close above the inverted hammer's body).

Double-Candle Patterns (7 Patterns)

6. Bullish Engulfing

A small red candle followed by a larger green candle that completely covers (engulfs) the first candle's body. At support, this is one of the strongest reversal signals available. The larger the engulfing candle relative to the first, the stronger the signal.

• Entry: On engulfing candle close
• Stop Loss: Below the engulfing candle's low
• Reliability: 70-75% at key support levels

7. Bearish Engulfing

Opposite of bullish — small green candle followed by larger red candle at resistance. Equally powerful reversal signal when found at significant resistance levels.

8. Tweezer Top

Two candles with matching or near-matching highs at resistance. The first candle is bullish, the second is bearish with the same high. Shows that sellers defended the resistance level twice. More reliable than a single rejection candle.

9. Tweezer Bottom

Two candles with matching lows at support. First bearish, second bullish. Buyers defended support twice — strong reversal signal.

10. Piercing Pattern

A bearish candle followed by a bullish candle that opens below the first candle's low but closes above the midpoint of the first candle. Shows buyers are gaining strength within the selling pressure. Less strong than engulfing but still a valid reversal signal.

11. Dark Cloud Cover

Opposite of piercing — bullish candle followed by bearish candle that opens above the first candle's high but closes below its midpoint. Sellers are overwhelming buyers. Bearish reversal at resistance.

12. Inside Bar

A candle whose entire range (high to low) is contained within the previous candle's range. Represents consolidation and energy building. The breakout from an inside bar, especially at key levels, often produces powerful moves.

• Entry: Pending order above high (buy) or below low (sell) of the mother bar
• Stop Loss: Opposite side of the mother bar
• Reliability: 60-65% (breakout direction prediction is the challenge)

Triple-Candle Patterns (5 Patterns)

13. Morning Star

Three-candle bullish reversal: Large red candle → small indecision candle (doji or spinning top) → large green candle. Found at support after a downtrend. One of the most reliable reversal patterns.

• Reliability: 70-75% at key support

14. Evening Star

Bearish equivalent: Large green → small indecision → large red. Found at resistance after an uptrend. Equally reliable.

15. Three White Soldiers

Three consecutive green candles, each opening within the previous candle's body and closing higher. Strong bullish momentum signal. Most effective after a pullback to support in an uptrend.

16. Three Black Crows

Three consecutive red candles, each opening within the previous candle's body and closing lower. Strong bearish momentum. Most effective after a rally to resistance in a downtrend.

17. Three Inside Up/Down

An inside bar pattern followed by a confirmation candle. Three Inside Up: large red → inside bar (smaller, bullish) → bullish candle closing above the first candle's high. Confirms the reversal that the inside bar suggested.

Continuation Patterns (3 Patterns)

18. Rising Three Methods

A large green candle followed by 3-4 small red candles (all within the first candle's range), then another large green candle. The small candles represent a pause/consolidation within the trend. The final large candle confirms the trend continues.

19. Falling Three Methods

Bearish equivalent: large red → 3-4 small green candles → large red. Trend pause, then continuation downward.

20. Bullish/Bearish Kicker

Two candles where the second opens at or beyond the previous candle's open in the opposite direction, creating a gap. Extremely rare but extremely powerful. A bullish kicker means the second candle opens at or above the first candle's open (leaving a gap) and closes strongly bullish. Signals a violent sentiment shift.

Pattern Reliability Rankings

Context is Everything — Where to Trade Patterns

A candlestick pattern without context is just a shape on a chart. To turn patterns into profitable trades, you need context:

Best Locations for Pattern Trades

1. Key support/resistance levels — Daily or weekly levels with multiple historical reactions
2. Order Blocks — Where institutional orders were placed (SMC concept)
3. Fair Value Gaps — Price imbalances that attract price
4. Fibonacci retracement levels — 61.8% and 78.6% retracements of major swings
5. Round numbers — 1.1000, 1.0500, 2000.00 (gold) — psychological levels

Context Checklist Before Trading a Pattern

• Is the pattern at a significant support/resistance level? (Yes = trade, No = skip)
• Is the pattern aligned with the higher timeframe trend? (With trend = higher probability)
• Is the risk-reward at least 1:1.5? (If not, the level is too far from the next target)
• Is there upcoming high-impact news? (Within 30 minutes = skip)
• Is the pattern on H1 or higher timeframe? (Lower TF = less reliable)

Trading Rules for Candlestick Patterns

1. Wait for the candle to CLOSE — Never trade an incomplete candle. What looks like a pin bar can become an engulfing by close time.
2. Confirm with the next candle — For maximum safety, wait for the next candle to confirm direction before entering. This costs a few pips but significantly reduces false signals.
3. Stop loss at structural level — Place your stop beyond the pattern's extreme (pin bar wick, engulfing low) plus 5-10 pips buffer.
4. Target the next key level — Your take profit should be at the nearest opposing support/resistance level, ensuring minimum 1:1.5 risk-reward.
5. One pattern per level — If you already have a trade based on a pattern at a level, do not add another. The level is either going to work or it is not.

5 Pattern Trading Mistakes

1. Trading every pattern you see — Not every pin bar or engulfing is worth trading. Only trade patterns at significant levels with proper context.
2. Ignoring the trend — A bullish engulfing in a strong daily downtrend is a counter-trend trade with lower probability. Trade with the trend whenever possible.
3. Using low timeframes — M5 and M15 candlestick patterns are mostly noise. Stick to H1 and above for reliable signals.
4. No stop loss — Even the best pattern fails sometimes. Always have a stop loss in place before the trade activates.
5. Over-complicating — You do not need to memorize all 20 patterns. Master 5 core patterns (pin bar, engulfing, inside bar, doji, morning/evening star) and ignore the rest until you are consistently profitable.

Pro Tips from 29 Years Experience

1. The daily candle is the most important candle — Every day, look at where the daily candle closed relative to key levels. A daily pin bar at a key level is one of the highest-probability setups in all of trading.
2. Confluence multiplies reliability — Pin bar + Order Block + Fibonacci 61.8% + daily support = extremely high probability. Stack multiple confluences before trading.
3. Failed patterns are signals too — If a bullish pin bar at support fails and price breaks below, that is actually a stronger signal that the support has broken. Trade the failure, not the pattern.
4. Volume confirms patterns — An engulfing pattern with high volume is much more significant than one with low volume. Volume shows conviction.
5. Print charts and study — I spent years printing daily charts, circling patterns, and tracking outcomes. This physical process builds pattern recognition faster than staring at screens.

Frequently Asked Questions

Most reliable patterns?

Engulfing (70-75%), Morning/Evening Star (70-75%), and Pin Bar (65-70%) at key levels. Reliability depends heavily on context.

Work in all timeframes?

More reliable on H4, Daily, Weekly. H1 minimum recommended. M1-M15 generate too many false signals.

Trade patterns alone?

No. Combine with support/resistance, trend direction, and volume. Context determines whether a pattern is worth trading.

How many to learn?

Start with 5: Pin Bar, Engulfing, Inside Bar, Doji, Morning/Evening Star. These cover 90% of what you need.

EA Semi-Auto recognition?

Yes. Incorporates candlestick pattern recognition combined with SMC analysis for higher-probability signals.

Conclusion

Candlestick patterns are the language of the market. Learning to read them gives you direct insight into the battle between buyers and sellers. But remember — patterns are just one piece of the puzzle. They must be read in context: at key levels, with the trend, and with proper risk management.

Start with the 5 core patterns, practice identifying them on historical charts, then trade them on a demo account until you can consistently recognize and execute them. Save this cheat sheet and refer to it until the patterns become second nature.