All 35 Candlestick Chart Patterns in Stock Market

Candlesticks are used to identify trading patterns that help technical analysts set up trading systems. In addition, these Patterns are used to predict the future direction of pricing movements. Candlestick patterns are formed when two or more candlesticks are grouped together in a certain way. Sometimes a single one can also give powerful signals. So, let's discuss all 35 patterns and how to read them.

Types of Candlestick Patterns - Table of Contents

How to Read Candlesticks?
Types of Candlestick Patterns
Bullish Reversal Candlestick Pattern
Bearish Candlestick Patterns
Continuation Candlestick Pattern

How to Read Candlesticks?

Candlestick charting originated in Japan over 100 years before Western society had developed bar charts and point-to-figure charts. During the 1700s, a Japanese man named Homma found a way to link the demand-supply of rice with the price. He also witnessed that the emotions of traders highly influenced markets. A daily candle chart shows the security's open, highs, lows, and closing prices for the day. The candlesticks' wide or rectangle part is known as the 'real body' that shows the link between the opening and closing prices. This shows the price ranges between the opening and closing that day's trading.

When the real body is black or red, then it means that closing is lower than opening and is known to be a bearish candle. This means that after the prices opened, the bear pushed them down and so the closing prices were lower.

If the real body is empty, green, or white, then it means that the close was higher than the opening, also known as a bullish candle. This means that once the prices opened, the Bulls pushed it up and closed it higher than the opening price.

The thin vertical lines above and below the real body are known as wicks or shadows that showcase the highs and lows of trading sessions.

Before we jump into the 35 Candlestick charts, let's look at a few assumptions that need to be kept in mind:

Strength is represented by a green or bullish candle, and weakness by a red or bearish one. When a person is buying, then it should be a green candle day, and when selling a red candle one.
There could be minor variations to the patterns depending on the market situation.
Look for previous trends. If you see a bullish reversal pattern, then the prior trends will be bearish and vice versa.

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35 Types of Best Candlestick Chart Patterns

35 types of Candlestick patterns can be divided into three patterns:

Bullish Reversal patterns
Bearish Reversal patterns
Continuation patterns.

Bullish Reversal Candlestick Pattern

The Bullish reversal candlestick patterns indicate that the downward trend is going to get reversed to an upward one. So, traders need to be cautious about short positions when forming their reversal chart patterns.

The different types of bullish reversal candlesticks are:

1. Hammer

A single candlestick pattern, Hammer, is formed at the end of the downward trend and signals a bullish reversal. The real candle body is small and located at the top, with a lower shadow that is more than twice the real body. This chart pattern has little to no upper shadow. The psychology behind this formation is that when the prices opened, the sellers pushed down the price. But when the buyers came into the market, they pushed the prices up and closed the trading session to more than the opening prices. This results in the formation of a bullish pattern and signifies that buyers took back the market.

2. Piercing

The Piercing pattern is a multi-candlestick chart formed to post a downward trend that indicates a bullish reversal. This pattern is formed due to two candles - the first a bearish candle and the second a bullish one. The second one opens the gap down but closes at more than 50% of the real body of the first one. This shows that the bulls are in the market, and a bullish reversal is taking place.

3. Bullish Engulfing Pattern

Another multi-candlestick pattern, Bullish Engulfing, is formed post a downward trend, thus indicating a bullish reversal. Formed by two candlesticks, the second one engulfs the first. The first candle is a bearish one that indicates the continuation of the downward trend. The second candle is a long bullish one that completely engulfs the first, showcasing that the bulls are back in the market.

4. The Morning Star

The Morning Star pattern is another multiple candlestick chart that is formed post a downward trend, indicating a bullish reversal. Made of 3 candlesticks - the first one is bearish, the second a Doji, and the third a bullish one. The first candle showcases the downward trend continuation, while the second one indicates indecision in the market. The third bullish candle shows that the bulls are back to reverse the market. In this case, the second candle must be completely out of the real body of the first and third ones.

5. Three White Soldiers

The Three Whtie Soldiers is another multi-candlestick pattern that is formed after a downward trend that indicates a bullish reversal. These candlestick patterns are made of three bullish bodies that do not have long shadows that are open within the real body of the previous candle in the pattern.

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6. White Marubozu

This single stick pattern is formed post a downward trend that indicates a bullish reversal. The candlestick has a long bullish body that has no upper or lower shadows that shows the bulls exerting buying pressure and the markets taking a bullish turn.

7. Three Insides Up

The three insides up is a multi-candlestick pattern that forms post a downward trend. It consists of three candlesticks - the first being a bearish candle, the second a small bullish candle in range of the first one, and the third a long bullish candle confirming the bullish reversal. The first and second candlesticks should have a harami candlestick pattern.

8. Bullish Harami

This multi-candle chart pattern consists of two candlesticks - the first one being a tall bearish one, the second being a small bullish one that is in range of the first one. The first candlestick shows a continuation of the bearish trend, while the second shows that the bulls are back in the market.

9. Tweezer Bottoms

The Tweezer Bottom candlestick pattern forms at the end of the downward trend and is made up of two candlesticks - the first one being bearish and the second one being bullish. Both candles are at the same low. This pattern is formed when the previous trend is downwards. A bearish tweezer candlestick trend is formed when it looks like the continuation of the ongoing downward trend. The next day, the second bullish candle is low, indicating a support level. The bottom-most candle with the same low indicates the strength of the support and also signals that the downward trend can get reversed to form an upward trend. Due to this, the bull steps into action and moves the price up.

10. Inverted Hammer

An inverted hammer is formed when an inverse of the Hammer candlestick pattern is formed, with a single candlestick's real body located towards the end, and there is a long upper shadow. The pattern forms when the closing and opening prices are closer to each other, and the upper shadow is longer than twice the real body.

11. Three Outside Up

The three outside up pattern is a multi-candlestick one that forms after a downwards trend that indicates a bullish reversal. Consists of three candlesticks - the first one being a short bearish candle, the second a large bullish one that covers the first one, and finally, the third one, which is a long bullish one confirming the bullish reversal.

The first two candlesticks charts should be in the Bullish Engulfing candlestick pattern.

12. On-Neck Pattern

This pattern occurs when a real long-bodied bearish candle is followed by a smaller real body bullish one that gaps down on the open but then closes near the prior candles closing. This on-neck pattern is called a neckline as the two closing prices are the same or almost the same forming a horizontal neckline.

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13. Bullish Counterattack

This pattern indicates a bullish reversal which predicts the upcoming reversal of the current downward trend. The candlestick pattern is a two-bar one that appears in a downward trend. The pattern needs to meet the following conditions:

There must be a strong downward trend in the market
The first candle must be a long black candle that has a real body
The second candle must be long but a white candle and must close towards the close of the first candle.

Bearish Candlestick Patterns

The Bearish Reversal candlestick pattern indicates the upward trend that reverses to a downward one. Traders need to be cautious about their long-term positions when these patterns form.

Here are the different types of bearish reversal candlestick patterns:

14. The Hanging Man Pattern

This single candlestick pattern forms at the end of an upward trend and signals a bearish reversal. The real candle body is small and is located at the top with a lower shadow that should be twice the real body. These candlestick patterns have little to no upper shadows. The psychology behind the candle formation is that the prices opened, but sellers pushed them down. But then buyers came in and tried to push the prices up but were not successful as the prices closed below the opening prices.

15. Dark Cloud Covers

The Dark Cloud Covers are multi-candlestick patterns that are formed post the upward trend in a bearish reversal. Formed of two candles - the first is a bullish one that indicates the continuation of the upward trend, while the second one is a bearish candle that opens the gap but closes at more than 50% of the real body of the previous one, which shows that bears are back in the market and a reversal is taking place.

16. Bearish Engulfing

This multi-candlestick pattern forms after an upward trend that indicates a bearish reversal. Formed by two candles, the second one engulfs the first bullish candle which indicates a continued upward trend. The second candle is a long bearish one that completely engulfs the first one showing that the bears are back in the market.

17. The Evening Star

This multi-candlestick pattern forms post an upward trend that indicates a bearish reversal. Made of 3 candlesticks - the first a bullish one, the second a Doji, and the third a bearish one. The first candle has a continued upward trend, the second one a Doji indicating market indecision, and the third one a bearish candle that shows the reversal taking place. But the second candle should be completely out of the real bodies of the first and third one.

18. Three Black Crows

This multiple candlestick pattern forms post an upward trend that indicates a bearish reversal. These candlesticks are made of three long bearish bodies that do not have long shadows and are opened within the real body of the previous candle.

19. Black Marubozu

This single candle pattern forms after an upward trend that indicates a bearish reversal pattern. This chart has a long bearish body with no higher or lower shadows that showcase the bears are exerting selling pressure, and the markets turn bearish. At this candle formation, buyers need to be cautious and close their buying positions.

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20. Three Inside Down

This multi-candle pattern forms after an upward trend that indicates a bearish reversal. Consists of three candlesticks - the first a long bullish one, the second a small bearish in the range of the first, and the third a long bearish one is confirming the bearish reversal. The first and second candlesticks should be of the Harami candlestick pattern.

21. Bearish Harami

The Bearish Harami pattern is a multi-candle one that forms after an upward trend that indicates a bearish reversal. It is made of two candlesticks - the first being a bullish one and the second a small bearish candle that is in the range of the first candlestick. The first bullish candle showcases the bullish continuation, and the second shows that the bears are back in the market.

22. Shooting Star

The Shooting Star pattern is formed when the upward trend ends and gives the bearish reversal signal. In this candlestick chart, the real body is at the end and has a long upper shadow. This is the reverse of the Hanging Man pattern. The pattern forms when both opening and closing prices are near to one another, and the upper shadow is more than twice the real body.

23. Tweezer Top

This pattern is formed at the end of an upward trend. Consisting of two candlesticks - the first one bullish and the second one bearish. But both the tweezer candlesticks make the same high. When the Tweezer top pattern forms, the previous trend is upwards. A bullish candlestick forms that look like a continuation of the ongoing trend. The next day, the high of the second day's bearish candle high indicates that there is a resistance level. Bulls raise the price upward but are not willing to buy at higher rates.

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24. Three Outside Down

This multiple candlestick pattern forms post an upwards trend that indicates a bearish reversal. Consisting of three candlestick patterns - the first a short bullish one, the second a bearish one that covers the first, and the third a long bearish candle confirming the bearish reversal. The relationship between the first and second one is of the Bearish Engulfing candlestick pattern.

25. Bearish Counterattack

The Bearish counterattack pattern is a reversal pattern that appears when there is an upward trend in the market. It predicts that the current upward trend will end, and the downward trend will take over.

Continuation Candlestick Pattern

26. Doji

This candlestick pattern of indecision is formed when the opening and closing prices are almost similar. It forms when both the bullish and bearish trends are fighting to take control of the prices, but nobody succeeds in taking complete control. This pattern looks like a cross and has a small real body and long shadows.

27. Spinning Top

This pattern is similar to the Doji showcasing an indecisive market. The main difference between the two is that the real body of the spinning top is larger as compared to the Doji.

28. Falling Three Methods

This is a bearish five-candle pattern that signals the interrupting ongoing downward trend, but not a reversal. Made of two long candlestick charts, it showcases the direction of the trend - downwards at the beginning and end, with three short counter-trending candlesticks in the middle. The candlestick pattern is important as it showcases to traders that the bullish market still does not have enough power for a reversal.

29. Rising Three Methods

This bullish five-candle pattern shows an interruption of the continued trend, but not a reversal. Made of two long candlesticks in the direction of the trend, the upward trend is at the beginning and end, but with three shorter counter trend candlesticks in the middle. This trend shows traders that the bears do not have enough power to reverse this.

30. Upside Tasuki Gap

This pattern forms with three candles and is an ongoing upward trend. The first one is a long-bodied bullish candlestick, the second a bullish one formed after a gap upwards, and the third one is a bearish candle that closes the gap between the first two.

31. Downwards Tasuki Gap

This bearish continuation candlestick pattern is made up of three candles - the first a long-bodied bearish candle, the second a bearish with a gap down, and the third a bullish candle that closes the gap formed between the first two ones.

32. Mat-Holding

A mat-holding pattern candlestick forms to indicate the continuation of a previous trend. This can be in a bearish or bullish pattern. The bullish one begins with a large bullish candle that has a gap higher and three smaller candles that move lower. These candles stay higher than the first candle. The fifth candle is a large one that moves upside again. The overall pattern occurs within an upward trend.

33. Rising Window

This candlestick pattern consists of two bullish candles with a gap in them. The gap is spaced between the high and low of the two candles that occur due to higher trading volatility. It is a continuing trending pattern that indicates the strong strength of buyers in a market.

34. Falling Window

This pattern is of two bearish candlesticks with a gap in them. The gap is an area between the higher and lower of the two candlesticks. This occurs due to large trading volatility. This trend pattern indicates a stronger seller strength in the market.

35. High Wave

This indecision pattern shows that the market is neither bullish nor bearish. It occurs at the support and resistance levels of the market, where the bulls and bears battle each other to try to push the price in their favor. The candlesticks are depicted with long lower shadows and longer upper wicks. But they have smaller bodies. The long wicks showcase a large amount of movement in price during the given period. But ultimately, the price ends up closing near the opening price.

Wrapping Up

When planning to invest in the market, you should check the candlestick patterns with other technical indicators to see how the market is doing. But remember always to ask a specialist in the industry before you invest any money to know their thoughts or ideas so that you can plan accordingly. In addition, being financially literate will help you understand how the market works and will give you better support when you plan to invest your hard-earned money in this volatile market.