39 Different Types of Candlestick Patterns

Candlestick patterns are visual representations of price action in the financial markets. They are formed by the daily open, high, low, and close prices plotted as colored or hollow boxes known as “candles”. There are 39 major candlestick patterns that traders analyze to identify potential opportunities to buy and sell. These patterns provide insight into market psychology and future price direction.

Candlestick patterns are categorized into single, double, and triple bar patterns. Single bar patterns like the hammer and shooting star involve analysis of one candle. Double bar patterns such as tweezer tops and bottoms compare two candles. Triple bar patterns like morning and evening stars analyze three candle formations. Candlestick patterns derive their names from military signaling methods used in feudal Japan.

The most powerful and profitable candlestick patterns are continuation and Reversal patterns that mark key support and resistance levels. These patterns signal when market momentum is shifting from bullish to bearish sentiment or vice versa. Some examples include the engulfing pattern, Harami pattern, dojis, and spinning tops.

The engulfing pattern is considered one of the strongest as it indicates a dramatic shift in market direction when a large candle totally engulfs the previous candle’s body. A bullish engulfing pattern signals strong buying momentum while a bearish engulfing pattern indicates increased selling momentum.

Doji candlesticks also signal powerful indecision in the market when opening and closing prices are equal. The presence of a doji at key support or resistance levels warns of a potential reversal ahead. Dragonfly and gravestone dojis are even more significant when they form at swing highs or lows.

To effectively trade candlestick patterns, it is essential to combine analysis with other indicators like volume, support and resistance, and trend direction. No single candlestick pattern is absolutely predictive. But incorporating candlestick analysis into an overall trading strategy can greatly improve timing and execution.

1. Bullish Engulfing

The bullish engulfing pattern is a powerful two-candle reversal pattern that signals a potential change in trend from bearish to bullish. It appears at the end of a downtrend and indicates buying momentum is accelerating.

This pattern forms when a small red candle is followed by a large green candle that “engulfs” the body of the previous candle. Specifically:

• The first candle has a small red body showing that bears were in control that day
• The second candle opens below the close of the first candle
• The second candle closes above the open of the first candle
• The large green candle shows that bulls have overwhelmed the bears

A bullish engulfing pattern indicates the balance of power is shifting from sellers to buyers. The uptrend may continue as more traders take long positions.

Key Details

Parameter	Description
Preceding Trend	A downtrend (series of red candles)
Bullish Candle	The second candle is a long green candle that engulfs the first
Size	The larger the engulfing candle, the more significant the signal
Volume	Volume should be higher on the bullish engulfing candle

The bullish engulfing pattern is even more powerful when it occurs at key support levels or after a period of indecision like a doji candle. This shows traders were unsure but ultimately buyers prevailed in driving price higher.

How to Trade the Bullish Engulfing Pattern

Traders will open long positions when a bullish engulfing pattern forms, placing stop losses below the low of the engulfing candle. Profit targets are set at key resistance levels or based on a reward/risk ratio like 2:1. It is key to wait for confirmation before entering trades as engulfing patterns can quickly reverse. Confirmation comes when price breaks above the high of the engulfing candle.

The bullish engulfing candlestick is a major reversal sign that marks the end of a downtrend. Its large size signals powerful buying pressure that is overcoming selling momentum. This pattern can lead to extended upside moves making it lucrative for traders to identify.

2. Bullish Spinning Top

The Bullish Spinning Top is a single candlestick pattern that indicates a potential reversal of a downward trend in a stock or index. It is characterized by a long upper shadow, small real body, and little or no lower shadow.

This pattern forms when the open, high, and close prices are very near the upper end of the trading range, showing that buyers were able to push prices higher during the period. However, the long upper shadow indicates that sellers were also able to force prices down from their highs, creating a spinning top appearance. The small real body of the candle suggests a relatively equal balance between buying and selling pressure for the period.

There are a few key things to look for in a Bullish Spinning Top pattern:

• The real body of the candle is small and near the high of the day’s trading range
• There is a long upper shadow indicating selling pressure
• There is little or no lower shadow – prices did not drop much below the open
• It occurs during a clear downtrend, indicating a potential trend reversal

The psychology behind this pattern is that the strength of the uptrend (indicated by the long upper shadow) shows that buyers have become emboldened and more aggressive bidding up prices. This tips the supply/demand balance in favor of buyers. Even though sellers were able to force prices back down from their highs and create uncertainty (the small real body), the buying pressure was formidable.

A Bullish Spinning Top pattern needs to be confirmed by a strong up day following it to indicate that the momentum has shifted to the upside. This confirmation may take the form of a long green (or white) candle closing well into the top half of that candle’s range. Volume is also important when confirming the validity of this pattern – stronger buying volume on the confirmation day lends more strength to the signal.

Some key advantages of using the Bullish Spinning Top candlestick pattern include:

• Visual simplicity – The pattern is very easy to identify on a chart
• Indicates shifting momentum – The pattern foreshadows a potential change from selling to buying pressure
• Earlier reversal signal – It can precede trend-change confirmation by other indicators
• Focused indicator – Isolates a single period’s price action to identify momentum shifts

The disadvantages of this pattern are:

• Requires confirmation – A single Bullish Spinning Top candle does not provide an actionable signal on its own
• Subject to false signals – If not confirmed, the pattern fails to lead to the expected reversal
• Context dependent – Needs to be considered in the context of overall technical analysis

3. Bearish Spinning Top

The Bearish Spinning Top is a single candlestick pattern that signals a potential reversal of an upward price trend to a downward trend. It is formed when there is significant selling pressure during the period that drives the price well below the opening level, but buyers are also able to push the price back up to close near the middle of the trading range for the period.

There are a few key characteristics of the Bearish Spinning Top pattern:

• The real body of the candle is small and centered vertically in the trading range
• There is a long upper and lower shadow, giving the candle a “spinning top” appearance
• It occurs during a clear uptrend, signaling a potential trend reversal

The psychology behind this pattern relates to the battle between buyer and seller strength. The long lower shadow represents strong selling pressure driving prices down intraday. However, the ability for prices to recover back up to the mid-range by the close tells us buyers are still willing to buy the dip. The small real body signals there is uncertainty in the market and a potential shift in momentum from upside to downside.

Below is a table summarizing the key details of a Bearish Spinning Top candlestick:

Attribute	Description
Sentiment	Bearish, indicating potential trend reversal
Previous Trend	Uptrend
Open/Close Range	At or near middle of trading range
Upper/Lower Shadows	Long shadows indicating volatility
Real Body	Small real body centered vertically

The Bearish Spinning Top pattern needs bearish confirmation on the following trading day, such as a long red candle closing well into the bottom half of its range on heavy volume. Lack of confirmation keeps the uptrend intact.

4. Bullish Harami

The Bullish Harami is a two-candle reversal pattern signaling a potential end of a downtrend. It is characterized by a large red candlestick followed by a small green candlestick contained within the body of the prior red candle.

The anatomy of a Bullish Harami pattern is:

• Day 1 – A long red candlestick continuing the established downtrend
• Day 2 – A small green real body that gaps below Day 1’s real body and closes within its range

The psychology behind this pattern relates to a shift in momentum from bearish to bullish. The initial long red candle reflects strong selling pressure. The next day opens lower but buyers quickly step in to fill the gap down and bid prices higher by the close. This creates a small real body and indicates the selling pressure has eased.

Below are the key details of a Bullish Harami:

Attribute	Description
Sentiment	Bullish, signaling potential trend reversal
Previous Trend	Downtrend
Position	Small real body gapped down within prior body
Color	Red then green real bodies

Confirmation of the pattern often comes as a large bullish candle pushing the price to new short-term highs. This validates the transition from selling momentum to buying momentum.

5. Tweezer Bottom

The Tweezer Bottom is a two-candle reversal pattern signaling a potential bottom in a downtrend. It gets its name from the visual pattern formed by matching lows of two adjacent candlesticks, resembling the pinchers of a pair of tweezers.

The anatomy of a Tweezer Bottom pattern is:

• Day 1 – A red candle continuing the established downtrend
• Day 2 – A green candle with the same or nearly the same intraday low as Day 1

The psychology behind this pattern relates to sellers becoming exhausted, driving prices down to new lows. This flushes out weak hands. The next period opens around this new low area and buyers aggressively step in around that low, sending prices solidly higher by the close.

Below are the key details for identifying Tweezer Bottom candles:

Attribute	Description
Sentiment	Bullish reversal pattern
Previous Trend	Downtrend
Lows	Matching or nearly matching lows
Real Bodies	Opposite colors (red then green)

Confirmation comes when bullish momentum pushes the price higher over the next few days or weeks. Lack of upside follow through may lead to pattern failure.

6. Bearish Engulfing

The Bearish Engulfing pattern is a two-candle formation signaling potential reversal of an uptrend to a downtrend. It is characterized by a large red candlestick fully engulfing a preceding smaller green candlestick during an upward price move.

The anatomy of a Bearish Engulfing pattern includes:

• Day 1 – A green candle continuing the uptrend
• Day 2 – A large red candle that engulfs the body of Day 1

The psychology behind this pattern relates to momentum shifting from bulls to bears. The first green candle shows sustained buying pressure and upside continuation. The next period opens higher but strong selling pressure drives the price all the way back down below the prior close. This “engulfing” action signifies bearish traders have overwhelmed the bulls.

Below are the key details of a Bearish Engulfing candle:

Attribute	Description
Sentiment	Bearish reversal pattern
Previous Trend	Uptrend
Position	Large red body engulfing small green body
Relationship	Body of Day 2 “engulfs” body of Day 1

Ideally, bearish confirmation comes when the pattern leads to heavy selling volume and downward momentum over the next few periods. Lack of downside follow through can lead to failure.

7. Doji

A Doji is a single candlestick pattern with a body so small that the open and close prices are virtually equal. The candle looks like a cross, giving very little directional information about the trading session and signaling market indecision.

There are a few key traits of a Doji candlestick:

• The open and close are at or very near the same price level
• There may be upper and lower shadows indicating some volatility
• The skinny body is centered horizontally on the candle
• It signals uncertainty and tug-of-war between buyers and sellers

The psychology behind the Doji relates to an equal balance of power between bulls and bears for that period. This gridlock between supply and demand usually comes after an established trend and indicates a potential shift in momentum or trend change may be imminent.

Below are key details for spotting Doji candles:

Attribute	Description
Sentiment	Neutral or reversal indication
Previous Trend	Typically continues a well-defined trend
Open/Close	At or very near the same price
Body	Very small centered between shadows

Confirmation may come as a breakout in either direction or development of a new trend shortly after the Doji candle. Context is important when interpreting a Doji signal.

8. Gravestone Doji

The Gravestone Doji is a single candlestick pattern signaling a potential reversal of an uptrend to a downtrend. It is formed when the open, low, and close prices are all very near the low of the trading range for the period. It gets its name from the tombstone-like appearance of having a long upper shadow but little or no lower shadow.

The anatomy of a Gravestone Doji includes:

• Open, low, and close clustered near the bottom of the trading range
• A long upper shadow indicating buyers pushed prices higher intraday
• Little or no lower shadow below the long body

The psychology behind this pattern relates to upside momentum failure. While buyers initially bid prices higher as the period opened, bears took control and drove prices sharply lower by the close. This transition from optimism to pessimism signals potential trend reversal.

Below are the key details of a Gravestone Doji:

Attribute	Description
Sentiment	Bearish reversal indication
Previous Trend	Uptrend
Position	Long body near low of range
Upper/Lower Shadow	Long upper shadow, little or no lower shadow

Confirmation comes when heavy selling volume drives prices significantly lower over subsequent trading periods, validating the indicated shift to downside momentum.

9. Dragonfly Doji

The Dragonfly Doji is a single candlestick pattern signaling a potential reversal of a downtrend to an uptrend. It is formed when the open, high, and close prices are all very near the high of the trading range for the period. It gets its name from the dragonfly-like appearance of having a long lower shadow but little or no upper shadow.

The anatomy of a Dragonfly Doji candlestick includes:

• Open, high, and close clustered near the top of the trading range
• A long lower shadow indicating sellers pushed prices lower intraday
• Little or no upper shadow above the long body

The psychology behind this pattern relates to downside momentum failure. While sellers initially drove prices sharply lower as the period opened, buyers took control and bid prices back up near the high by the close. This transition from pessimism to optimism signals potential trend reversal.

Below are the key details of a Dragonfly Doji:

Attribute	Description
Sentiment	Bullish reversal pattern
Previous Trend	Downtrend
Position	Long body near high of range
Upper/Lower Shadow	Little or no upper shadow, long lower shadow

Confirmation comes when strong buying volume drives prices significantly higher over subsequent trading periods, validating the indicated shift to upside momentum.

10. Three Outside Up

The Three Outside Up is a bullish reversal pattern composed of three consecutive candlesticks that marks a potential turning point signaling the end of a downtrend. The pattern gets its name from the fact that each successive candle makes a new high that “steps outside” the high of the previous candle.

The anatomy of a Three Outside Up includes:

• Day 1 – A long red candle continuing the downtrend
• Day 2 – A red candle that gaps below Day 1 and rallies to close above the midpoint
• Day 3 – A long green candle that closes well above the high of Day 1

The psychology behind this pattern relates to bullish momentum accelerating with each successive candle. The first candle shows strong selling pressure. The next candle opens lower but buyers emerge to pare losses. This sets the stage for the third candle which sees enthusiastic buying from the open, driving prices sharply higher and above the prior high.

Below are the key details of the Three Outside Up pattern:

Attribute	Description
Sentiment	Bullish reversal pattern
Previous Trend	Downtrend
Relationship	Each candle makes a higher high vs previous
Confirmation	Strong rally on Day 3

Confirmation comes with sustained upside follow-through over the subsequent days or weeks, showing buying momentum in control.

11. Three Inside Down

The Three Inside Down is a bearish reversal pattern composed of three consecutive candlesticks that marks a potential turning point signaling the end of an uptrend. The pattern gets its name from the fact that each successive candle makes a lower low that “steps inside” the low of the previous candle.

The anatomy of a Three Inside Down includes:

• Day 1 – A long green candle continuing the uptrend
• Day 2 – A green candle gapping above Day 1 and selling off to close below the midpoint
• Day 3 – A long red candle closing well below the low of Day 1

The psychology behind this top reversal pattern relates to bearish momentum accelerating with each successive candle. The first candle shows strong buying pressure. The next candle gaps up but sellers emerge to erase gains. This sets the stage for enthusiastic selling to drive prices sharply lower on Day 3.

Below are the key details of the Three Inside Down pattern:

Attribute	Description
Sentiment	Bearish reversal pattern
Previous Trend	Uptrend
Relationship	Each candle makes a lower low vs previous
Confirmation	Strong sell-off on Day 3

Confirmation comes with sustained downside follow-through over subsequent days or weeks, showing selling momentum in control.

12. Long Legged Doji

The Long Legged Doji is a single candlestick pattern signaling market indecision and potential reversal after a directional move. It gets its name from the very long upper and lower shadows or “wicks” extending out from the body, giving it exceptionally long legs.

The key traits of a Long Legged Doji include:

• The open and close are at or very near the same price level
• Very long upper and lower shadows indicate volatility
• The small body is centered horizontally between the shadows
• It shows a tug-of-war between buyers and sellers

The psychology behind this pattern relates to an equal balance of power between bulls and bears during the session. It usually forms after an extended trend where momentum is slowing. The long wicks reflect forceful but ultimately unsuccessful attempts by both sides to assert control. This battle leads to stalemate by the close, foreshadowing a potential shift in trend.

Below are the defining characteristics of Long Legged Doji candles:

Attribute	Description
Sentiment	Neutral, possible trend reversal
Previous Trend	Follows an established trend
Open/Close	At or very near the same price
Upper/Lower Shadows	Very long shadows dominate candle body

Confirmation may come as a breakout in either direction or start of a new trend after the long-legged Doji session. Context around the formation remains important for interpretation.

13. Hanging Man

The Hanging Man is a single candlestick pattern that forms at the end of an uptrend and signals a potential reversal in the market. Its name comes from the fact that it looks like a hanging man with a small body at the top and a long lower shadow underneath.

The key characteristics of a Hanging Man candle are:

• Forms after an uptrend
• Long lower shadow indicating sellers pushed the price down intraday
• Small real body at the top of the trading range
• Little or no upper shadow protruding from body

The psychology behind this pattern relates to faltering upside momentum. The long lower wick shows sellers were able to drive prices sharply lower during the session, forcing bulls to bid them back up by the close resulting in a small real body. This transition from optimism to pessimism indicates a potential peak or reversal.

Below are the details traders look for in a Hanging Man:

Attribute	Description
Sentiment	Bearish reversal indication
Previous Trend	Uptrend
Position	Small body near top of trading range
Lower Shadow	Long lower shadow dominates candle

Ideally the Hanging Man pattern would lead to a decline over the subsequent trading days on bearish confirmation. Lack of downside follow through could lead to a failed signal.

14. Double Candlestick Patterns

Double candlestick patterns are composed of two connected or related candlestick formations that combine to signal potential turning points or trend reversals. These patterns can highlight more complex market dynamics that unfold across two trading sessions.

There are a few key types of double candlestick patterns:

• Engulfing patterns – A large real body engulfs a smaller opposite colored real body in a directional pattern signaling potential reversals
• Harami patterns – A small real body nestles within the range of the prior long body, indicating indecision
• Tweezers – Two candles with matching highs or lows pinch together to signal potential bottoms or tops

The psychology behind double candle patterns relates to shifting momentum and transitioning power between bulls and bears over a pivotal two day period in the market.

Below are some notable examples:

Pattern	Description	Sentiment
Bullish/Bearish Engulfing	Large body engulfs small body	Reversal
Bullish/Bearish Harami	Small body within large body	Reversal
Tweezer Bottom/Top	Matching lows/highs	Reversal

Confirmation on the third trading day adds greater validity to the predicted reversal signaled by the double candlestick pattern in question.

15. Bullish Kicker

The Bullish Kicker is a two-candle pattern signaling a potential bottom reversal from a downtrend to an uptrend. It is composed of a long red candle extending the decline, followed by a green gap candle opening sharply higher with a strong rally above the previous candle’s range.

The anatomy of a Bullish Kicker includes:

• Day 1 – A red continuation candle closing on its lows
• Day 2 – A green candle gapping up above Day 1’s range and closing near its high

The psychology involves a sharp sentiment shift from pessimism to optimism. The initial candle reflects strong bearish conviction driving prices lower. But the next session gaps up sharply as buyers step in aggressively, sending prices higher and indicating bears have lost control.

Below are the key details of a Bullish Kicker:

Attribute	Description
Sentiment	Bullish reversal pattern
Previous Trend	Downtrend
Relationship	Gap higher open above prior range
Confirmation	Strong rally on Day 2

Bullish confirmation involves upside follow-through over subsequent days or weeks indicating buying momentum. Lack of continuation could lead to failure.

16. Piercing Line

The Piercing Line is a two-candle bottom reversal pattern signaling a potential end of a downward price trend. It is composed of a long red candle in line with the prevailing downtrend, followed by a strong green rally candle that pushes sharply up through the middle of the prior red candle’s body.

The anatomy of a Piercing Line includes:

• Day 1 – A red candle continuing the established selloff
• Day 2 – A green candle gaps open lower but rallies to close above the midpoint of Day 1’s body

The psychology involves bearish conviction on Day 1 getting shaken on Day 2. The initial candle shows strong selling pressure driving prices lower. But the next session gaps down only briefly before buyers assert themselves to close over halfway up the previous candle’s range. This shows the potential for bullish momentum to emerge.

Below are the key details of the Piercing Line pattern:

Attribute	Description
Sentiment	Bullish reversal pattern
Previous Trend	Downtrend
Position	Day 2 closes >50% into Day 1’s range
Confirmation	Upside follow-through on Day 3

Bullish confirmation involves further upside momentum over subsequent trading days. Lack of continuation could lead to pattern failure.

In summary, the Piercing Line candlestick signals potential exhaustion of the prevailing downtrend. Traders watch for this piercing formation to position for bullish reversals at intermediate-term bottoms.

17. Bearish Kicker

The Bearish Kicker is a two-candle pattern signaling a potential top reversal from an uptrend to a downtrend. It is composed of a long green candle extending the advance, followed by a red gap candle opening sharply lower with a strong sell-off below the previous candle’s range.

The anatomy of a Bearish Kicker includes:

• Day 1 – A green continuation candle closing on its highs
• Day 2 – A red candle gapping down below Day 1’s range and closing near its low

The psychology involves a sharp sentiment shift from optimism to pessimism. The initial candle reflects strong bullish conviction driving prices higher. But the next session gaps down aggressively as sellers take control, sending prices sharply lower and indicating bulls have lost control.

Below are the key details of a Bearish Kicker:

Attribute	Description
Sentiment	Bearish reversal pattern
Previous Trend	Uptrend
Relationship	Gap lower open below prior range
Confirmation	Strong sell-off on Day 2

Bearish confirmation involves downside follow-through over subsequent days or weeks indicating selling momentum. Lack of continuation could lead to failure.

18. Dark Cloud Cover

The Dark Cloud Cover is a two-candle bearish reversal pattern signaling potential exhaustion of an uptrend. It is composed of a green upside candle followed by a red down candle that opens above the prior close but drives sharply lower to close below the midpoint of the first candle’s body.

The anatomy of a Dark Cloud Cover includes:

• Day 1 – A green candle continuing the uptrend
• Day 2 – A red candle that gaps higher but closes below the midpoint of Day 1’s range

The psychology involves optimism getting undercut by a burst of pessimism. The first candle shows sustained buying interest and upside continuation. However, the next session gaps up optimistically but is immediately met with intense selling pressure that dominates and sends prices solidly lower by the close.

Below are the key details of the Dark Cloud Cover pattern:

Attribute	Description
Sentiment	Bearish reversal pattern
Previous Trend	Uptrend
Position	Day 2 closes
Confirmation	Downside follow-through on Day 3

Bearish confirmation involves heavy selling volume driving prices lower over subsequent trading periods. Lack of downside momentum could lead to failure.

19. Bearish Harami

The Bearish Harami is a two-candle reversal pattern signaling a potential peak and end of an uptrend. It is characterized by a large green candlestick followed by a small red candlestick contained within the body of the prior green candle.

The anatomy of a Bearish Harami pattern is:

• Day 1 – A long green candle continuing the established uptrend
• Day 2 – A small red real body that gaps above Day 1’s real body and closes within its range

The psychology behind this pattern relates to a shift in momentum from bullish to bearish. The initial long green candle reflects strong buying pressure. The next day opens higher but sellers quickly step in to fill the gap up and bid prices lower by the close. This creates a small real body and indicates the buying pressure has eased.

Below are the key details of a Bearish Harami:

Attribute	Description
Sentiment	Bearish, signaling potential trend reversal
Previous Trend	Uptrend
Position	Small real body gapped above within prior body
Color	Green then red real bodies

Confirmation of the pattern often comes as a large bearish candle pushing the price to new short-term lows. This validates the transition from buying momentum to selling momentum.

20. Tweezer Top

The Tweezer Top is a two-candle reversal pattern signaling a potential peak in an uptrend. It gets its name from the visual pattern formed by matching highs of two adjacent candlesticks, resembling the pinchers of a pair of tweezers.

The anatomy of a Tweezer Top pattern is:

• Day 1 – A green candle continuing the established uptrend
• Day 2 – A red candle with the same or nearly the same intraday high as Day 1

The psychology behind this pattern relates to buyers becoming exhausted, pushing prices up to new highs. This draws in weak hands. The next period opens around this new high area and sellers aggressively step in to send prices solidly lower by the close.

Below are the key details for identifying Tweezer Top candles:

Attribute	Description
Sentiment	Bearish reversal pattern
Previous Trend	Uptrend
Highs	Matching or nearly matching highs
Real Bodies	Opposite colors (green then red)

Confirmation comes when bearish momentum pushes the price lower over the next few days or weeks. Lack of downside follow through may lead to pattern failure.

21. Marubozu

The Marubozu is a single candlestick pattern characterized by a long real body with little to no shadows or wicks. This reflects strong conviction in one direction throughout the entire trading period, either bullish or bearish, indicating potential continuation of the prevailing trend.

There are a few key traits of Marubozu candles:

• Very long real body capturing most of the trading range
• Little to no upper or lower shadows protruding
• Bullish Marubozu closes on high with green body
• Bearish Marubozu closes on low with red body

The psychology behind this powerful pattern relates to dominance by one side. Bulls are in full control during a green Marubozu candle driving prices higher without letting bears push them down. The opposite is true for the red bearish version where bears enforce relentless selling pressure.

Below are details for identifying Marubozu candles:

Attribute	Bullish	Bearish
Sentiment	Bullish continuation	Bearish continuation
Previous Trend	Uptrend	Downtrend
Close Position	On the high	On the low
Shadows	None or very small	None or very small

Marubozu candles act as confirmation of the current trend. They show strong momentum in the prevailing direction which is likely to continue.

22. Triple Candlestick Patterns

Triple candlestick patterns are composed of three connected or related candlestick formations that combine to signal potential turning points or trend reversals. These complex multi-candle patterns reflect more intricate market dynamics that play out over three trading sessions.

There are a few key types of triple candle formations:

• Outside patterns – Each candle makes a new high or low beyond the previous candle in a directional pattern
• Inside patterns – Each candle moves countertrend but stays within the range of the prior candle
• Star patterns – Small real bodies nestled within the previous wide range candlestick

The psychology involves shifting momentum and rotating leadership between bulls and bears over a pivotal three day tug-of-war in the market.

Below are some notable examples:

Pattern	Description	Sentiment
Morning/Evening Stars	Small body gaps down/up within large body	Reversal
Three White/Black Soldiers	Three long bullish/bearish bodies	Continuation
Three Outside Up/Down	Successive higher/lower highs and lows	Reversal

Confirmation on the fourth trading day improves the reliability of the indicated reversal or breakout signaled by the triple candlestick pattern.

23. Morning Star Doji

The Morning Star Doji is a three-candle bullish reversal pattern that signals the end of a downtrend. It is made up of:

1. A long red candlestick that continues the current downtrend. This candle has a wide trading range and closes near the low of the day.
2. A Doji star. This candle gaps below the close of the previous red candle and has a very narrow trading range. The open and close are very near each other, forming a Doji. This shows indecision in the market after the strong downtrend.
3. A long green candle that gaps above the middle Doji candle. This candle closes well into the top half of the trading range, confirming that buyers have overpowered sellers and the downtrend is reversing to an uptrend.

To qualify as a Morning Star Doji pattern, the middle Doji candle must gap below the long red candle. This gap emphasizes the shock in sentiment from bearish to uncertain. The third green candle then confirms the uptrend with a strong close above the Doji’s midpoint.

The key significance of the Morning Star Doji pattern comes from the distinct trend reversal it signals. After a strong downtrend, the market gaps down but is unable to continue the bearish momentum. The Doji’s narrow range shows uncertainty over the next direction. Then buyers take over during the third candle and drive the price higher, kicking off a new uptrend.

Traders will enter long positions when the third candle closes above the Doji’s midpoint. Stops are placed below the low of the Doji candle. Profit targets can be set at previous resistance levels or using other analysis techniques.

The Morning Star Doji pattern tends to be most reliable when it occurs after a prolonged downtrend or at support levels. The long red candle emphasizes strong bearishness, while the Doji and green candle show this sentiment quickly reversing. Pay attention to any increase in volume on the green confirmation candle for added confidence.

24. Bullish Abandoned Baby

The Bullish Abandoned Baby is a three-candle bullish reversal pattern signaling the end of a downtrend. It is composed of:

1. A long red candle continuing the downtrend. This candle has a wide range and closes near the low.
2. A Doji candle that gaps below the previous candle. The open and close are at the same level, showing indecision.
3. A long green candle that gaps above the Doji. This candle closes well into the upper half, confirming buyers have taken over.

To qualify as a Bullish Abandoned Baby, the middle Doji must gap below the first red candle, emphasizing the shock sentiment shift. The green candle then gaps up from the Doji, showing a strong resumption of buying pressure.

Key details

Candle	Significance
Red candle	Continues downtrend
Doji	Gaps down, signals indecision after downtrend
Green candle	Gaps up from Doji, confirms uptrend

The significance of this pattern comes from the distinct trend reversal it signals. After a downtrend, sellers are suddenly unable to push the price lower. The Doji gap emphasizes the uncertainty over the next direction. Then buyers take over and drive the price higher, kicking off a new uptrend.

Traders will go long when the green candle closes well above the Doji’s midpoint. Stops are placed below the Doji’s low to limit risk. Profit targets can be set using previous resistance levels or other analysis techniques.

The Bullish Abandoned Baby tends to be most reliable after a prolonged downtrend or at support levels. The long red candle shows strong bearishness, quickly reversing with the Doji and green candle gaps. Pay attention to any increase in volume for added confidence.

25. Morning Star

The Morning Star is a three-candle bullish reversal pattern signaling the end of a downtrend. It consists of:

1. A long red candle continuing the sell-off. This candle has a wide range and closes near the low.
2. A small-bodied candle that gaps below the first candle’s close. This shows indecision after the downtrend.
3. A long green candle that closes well above the midpoint of the second candle. This confirms buyers have taken control.

To qualify as a Morning Star, the second candle must gap between the first candle’s close and midpoint. This emphasizes the shift from bearish to uncertain sentiment. The third candle then signals the uptrend resumption with its strong close.

Here are the key details:

Candle	Details	Significance
1	Long red candle Continues downtrend	Strong bearishness
2	Small-bodied candle Gaps below first candle’s close	Shows indecision after downtrend
3	Long green candle Closes above midpoint of second candle	Confirms uptrend resumption

The significance of this pattern comes from the distinct trend reversal signaled. After a downtrend, sellers suddenly fail to push prices lower. The small gap on the second candle shows uncertainty over the next direction. Then the third candle shows buyers taking control and driving the price higher in a new uptrend.

Traders will enter long positions when the green candle closes well above the midpoint of the second candle. Stops are placed below the low of the second candle to limit risk. Profit targets can be set using previous resistance levels or other analysis techniques.

The Morning Star tends to be most reliable after a prolonged downtrend or at support levels. The long red candle shows strong bearishness, quickly reversing with the next two candles. Pay attention to an increase in volume for confidence.

26. Evening Star Doji

The Evening Star Doji is a three-candle bearish reversal pattern signaling the end of an uptrend. It consists of:

1. A long green candle continuing the uptrend. This candle has a wide range and closes near the high.
2. A Doji candle that gaps above the previous candle’s close. The open and close are at the same level, showing indecision after the uptrend.
3. A long red candle that closes well into the lower half of the Doji candle’s range. This confirms sellers have taken control from buyers.

To qualify as an Evening Star Doji, the middle Doji must gap between the first candle’s close and midpoint. This gap emphasizes the