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30 Important Candlestick Patterns: The stock market constitutes emotions as it consists of a large number of people. These emotions can be largely responsible for the movements in the market. As people tend to exhibit similar behavior when dealing with familiar situations, the overall market movements can be understood to an extent using candlesticks.

Candlesticks are one of the important tools that help us in technical analysis. These 30 important candlestick patterns can help us recognize the interaction between the buyers and sellers in the market.

In this article, we will be covering 30 important candlestick patterns that every trader should know

Table of Contents

What is a candlestick?

A candlestick is a type of chart that indicates the opening price, the high, the low, and the closing price of a security for a specific time period.

A candlestick pattern comprises a body and a wick which shows us the information of the price in a simple and concise manner.

The body of the candle indicates the price at which a security has opened and closed during a specific time period. The wick or the shadow of the candle indicates the high and low security reached during a specific time period.

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A Candlestick can be divided into two categories:

  • Bullish Candlestick
  • Bearish Candlestick

Bullish Candlestick: A candle is said to be bullish when the body of the candle is green. In this candle, the bottom of the body represents the opening price and the top of the candle represents the closing price.

Bearish Candlestick: A candle is said to be bearish when the body of the candle is red. In this candle, the top of the body represents the opening price and the bottom of the candle represents the closing price.

Candlestick patterns - Basics

Now that we have understood how a candlestick looks, we will now look into 30 important candlestick patterns and understand how they represent the different sentiments in the market. 

30 Important Candlestick Patterns and How are they read

Below are the 30 important candlestick patterns that every trader should know before investing in the stock market

Single Candlestick pattern

Important Candlestick Patterns #1 – Marubozu Candlestick

A marubozu candlestick is a single candlestick formation that makes a big movement in a single direction with any pushback from the opposite direction. Marubozu candlesticks can be divided based on their bullish or bearish momentum

Bullish Marubozu Candlestick

This candlestick pattern represents extreme bullishness in the market. This candle indicates that the buyers are in control of the stock price throughout the trading session. In this candle, the low is the opening price and the high is the closing price for the session.

Candlestick patterns - Bullish Maribozu

Bearish Marubozu Candlestick

This candlestick pattern represents extreme bearishness in the market. This candle indicates that the sellers are in control of the stock price throughout the trading session. In this candle, the high is the opening price and the low is the closing price for the session.

Candlestick patterns - Bearish Maribozu

Important Candlestick Patterns #2 – Bullish Hammer

A bullish candlestick is a formation that appears after a falling trend in the market. This candle indicates that the market is likely going to make a reversal uptrend. This candle can be characterized by a small body and a wick at the bottom which is twice the size of the body.

The larger the wick of the candle, the better the chances are for its reversal. The body of the candle can be either green or red. This candle is formed at the bottom of the chart.

Candlestick patterns - Bullish hammer

Important Candlestick Patterns #3 – Hanging man

A hanging man is a candle pattern that looks identical to a bullish hammer. But the candle appears after an uptrend with an indication that the market is likely to make a reversal downtrend.

Candlestick patterns - Hanging Man

Important Candlestick Patterns #4 – Bullish Inverted Hammer

An inverted hammer is a candle formation that occurs at the bottom of the downtrend. It acts as a trigger for a potential upside in the market. This candle pattern has a small body and a wick only at the top which is as twice the size of the body.

The larger the wick of the candle, the better the chances are for its reversal. The body of the candle can be either green or red. This candle is formed at the bottom of the chart.

Candlestick patterns - Bullish Inverted Hammer

Important Candlestick Patterns #5 – Shooting star 

A shooting star pattern looks identical to a candle pattern but appears at the top of the uptrend. This candle is a trigger that indicates that markets may likely reverse downwards.

Candlestick patterns - Shooting Star

Doji candlestick Patterns

Dojis are candlestick patterns with wicks and nobody. A Doji candle opens and closes at the same price. The Doji candlestick patterns are of four types:

Important Candlestick Patterns #6 – Neutral Doji:

A neutral Doji is a candle pattern with no conviction of its own. This candle pattern indicates an equal number of buying and selling pressure. The future price movement will be uncertain in this pattern

Candlestick patterns - Neutral doji

Important Candlestick Patterns #7 – Long-Legged Doji

A long-legged Doji candle is considered the most prominent when they appear during a strong uptrend or a downtrend. The long-legged doji signal indicates that supply and demand are approaching balance and that a trend reversal may take place.

Candlestick patterns - Long Legged Doji

Important Candlestick Patterns #8 – Dragonfly Doji

Dragonfly Doji is a candlestick pattern that indicates a bullish reversal in the market. It mainly appears at the bottom of the downtrend.

A dragonfly Doji is formed when the open, high, and close are on the same price level and has a long lower wick 

Candlestick patterns - Bullish Dragonfly doji

Important Candlestick Patterns #9 – Bearish Gravestone Doji

Gravestone Doji is a candlestick pattern that indicates a bearish reversal in the market. It mainly appears at the top of the uptrend.

A dragonfly Doji is formed when the open, low, and close are on the same price level and has a  long upper wick 

Candlestick patterns - Gravestone Doji

Important Candlestick Patterns #10 – Spinning Top Candlestick

The spinning top is a candlestick pattern that is similar to a Doji candlestick which indicates indecision between the buyer and the seller in the market. 

The only differentiation between a Doji and a spinning top candle is their formation. The body of the spinning top is slightly larger when compared to a Doji. Due to the relatively small change in the market direction, it is known as a continuation pattern

Spinning top Candlestick can be divided into bullish and bearish forms depending on their opening and closing prices.

Candlestick patterns - Spinning Top

Double Candle Candlestick Patterns 

Important Candlestick Patterns #11 – Bullish engulfing

Bullish engulfing is a two-candlestick chart pattern that is formed when a red candle is followed by a large green candle that completely covers or engulfs the previous candlestick stick

In this pattern, the green candle opens below the red candle and closes above the red candle indicating a bullish signal in the market.

Candlestick patterns - Bullish Engulfing

Important Candlestick Patterns #12 – Bearish engulfing 

Bearish engulfing is a two-candlestick chart pattern that is formed when a green candle is followed by a red candle that completely covers or engulfs the previous candlestick stick

In this pattern, the red candle opens above the green candle and yet closes below the green candle indicating a bullish signal in the market.

Candlestick patterns - Bearish Engulfing

Important Candlestick Patterns #13 – Bullish Harami

A bullish harami is a pattern that is formed after a bear trend in the market. 

This pattern is formed when there is a large red candle followed by a small green candle inside the previous red candle. This pattern indicates the return of bulls in the market.

Candlestick patterns - Bullish Harami

Important Candlestick Patterns #14 – Bearish Harami

A Bearish harami is a pattern that is formed after a bull trend in the market. 

This pattern is formed when there is a large green candle followed by a small red candle inside the previous green candle. This pattern indicates the return of bears in the market.

Candlestick patterns - Bearish Harami

Important Candlestick Patterns #15 – Bullish Harami cross

A bullish harami cross is a pattern that is formed after a downtrend in the market. 

This pattern consists of a long red candle followed by a Doji candle that is located in the middle of the previous candle. This pattern forecasts a bull trend in the market.

Candlestick patterns - Bullish Harami Cross

Important Candlestick Patterns #16 – Bearish Harami cross

A bearish harami cross is a pattern that is formed after an uptrend in the market. 

This pattern consists of a long green candle followed by a Doji candle that is located in the middle of the previous candle. This pattern forecasts a downward trend in the market.

Candlestick patterns - Bearish Harami Cross

Important Candlestick Patterns #17 – Bullish Piercing Line

A Bullish Piercing Line is a candlestick pattern that indicates a reversal after an extended downtrend in the market. This formation indicates a resumption of the uptrend in the market

This candle formation consists of a red candle followed by a green candle which opens gap down and covers more than 50% of the previous candle while closing.

Candlestick patterns - Bullish Piercing Line

Important Candlestick Patterns #18 – Dark cloud cover

A Dark cloud cover is a bearish pattern that indicates a reversal after an uptrend in the market

This candle formation consists of a green candle followed by a red candle which opens gap up and covers more than 50% of the previous candle while closing.

Candlestick patterns - Dark Cloud Cover

Important Candlestick Patterns #19 – Tweezer Bottom Candlestick

A tweezer bottom is a bullish candlestick pattern that is formed at the end of a downtrend in the market. It is formed when the sellers are not able to push the prices down any further in the market.

This pattern consists of a red candle which is followed by a green candle. The green candle will have the same low as the red candle indicating support at that level

Candlestick patterns - Tweezer Bottom Candlestick

Important Candlestick Patterns #20 – Tweezer Top Candlestick

A tweezer top is a bearish candlestick pattern that is formed after an uptrend in the market. This pattern indicates the buyers not being able to push the price higher.

This pattern consists of a green candle which is followed by a red candle. The red candle will have the same high as the green candle indicating a resistance at that level.

Candlestick patterns - Tweezer Top

Important Candlestick Patterns #21 – Bullish homing pigeon

The bullish homing pigeon is a candlestick pattern that indicates the weakening of the current downtrend and shows the likelihood of a reversal

The pattern consists of a large red candle followed by another red candle within the range of the first candle

Candlestick patterns - Bullish Homing Pigion

Important Candlestick Patterns #22 – Bearish homing pigeon

The bearish homing pigeon is a candlestick pattern that indicates the weakening of the uptrend in the market and indicates the market reversal

The pattern consists of a large green candle followed by another green candle within the range of the first candle

Candlestick patterns - Bearish Homing Pigion

Triple Candle Candlestick Patterns

Important Candlestick Patterns #23 – Three white soldiers

Three white soldiers is a candlestick pattern that indicates bullishness in the market. This candle pattern is formed when long-bodied green candles appear that are close higher than the previous candle for three consecutive sessions.

Three White Soldiers

Important Candlestick Patterns #24 – Three black crows

Three black crows is a candlestick pattern that indicates a downtrend in the market. This candle pattern is formed when long-bodied red candles appear that are close lower than the previous candle for three consecutive sessions.

Three Black Crows

Important Candlestick Patterns #25 – Bullish Upside Tasuki gap

The Upside Tasuki gap is a candlestick pattern that indicates a continuation of the bullish trend in the market

This is a three-candle formation that consists of a large green candle followed by another green candle that has gapped above the previous candle. And the third candle that closes between the gaps of the previous two bars

Bullish Upside Tasuki Gap

Important Candlestick Patterns #26 – Bearish Downside Tasuki gap

The Downward Tasuki gap is a candlestick pattern that indicates a continuation of the downtrend in the market.

This pattern consists of a large red candle followed by another red candle that has gapped down below the previous candle. And the third candle that closes between the gaps of the previous two bars

Bearish Downside Tasuki Gap

Important Candlestick Patterns #27 – Morning star pattern

A Morningstar pattern is a candlestick formation that occurs after a downtrend in the market. This candle pattern signals the beginning of an uptrend in prices.

This candle pattern consists of a red candle followed by a small-bodied candle that closes below the previous candle. The third candle will be a large green candle that opened above the second candle.

The second candle can either be a green or a red candle.

Morningstar Pattern

Important Candlestick Patterns #28 – Evening star pattern

An evening star pattern is a candlestick formation that after an uptrend in the market. This candle pattern signals a downtrend in the market.

Evening Star Pattern

This candle pattern consists of a green candle followed by a small-bodied candle that closes above the previous candle. The third candle will be a large red candle that opened below the second candle.

The second candle can either be a green or a red candle

Important Candlestick Patterns #29 – Three inside up 

The three inside up is a candlestick formation that is formed at the bottom of the downtrend. It is a bullish pattern that indicates the reversal of the downtrend in the market

It is a three-candle pattern consisting of a long red candle followed by a green candle that covers the first candle at least till the midpoint. The third candle should be a green candle that should close above the first candle indicating the buyers overpowering the sellers.

Three Inside Up

Important Candlestick Patterns #30 – Three inside down

The three inside down is a candlestick formation that is formed at the top of an uptrend. It is a bearish pattern that indicates the reversal of the uptrend in the market.

It is a three-candle pattern consisting of a long green candle followed by a red candle that covers the first candle at least till the midpoint. The third candle should be a red candle that should close below the first candle indicating the sellers overpowering the buyers.

Three Inside Down

Conclusion

In this article, we discussed 30 important candlestick patterns divided as single candlestick patterns, double candlestick patterns, and triple candle stick pattern

Knowing the different 30 important candlestick patterns can help in knowing how the market psychology works and using these candle patterns along with other technical tools can help you take better trades in the market.

You can now get the latest updates in the stock market on Trade Brains News and you can even use our Trade Brains Portal for fundamental analysis of your favorite stocks.

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