Candlestick patterns
Shapes made by one or a few candles. Each is a compressed description of what buyers and sellers did inside that period — and none of them work without context.
Updated September 4, 2026
What a candle records
The body is the distance between open and close — the net result of the period. The wicks are where price went and was rejected. That rejection is the information; the body is just the score.
A long lower wick means price fell and buyers pushed it back before the close. Not a prophecy, a record: someone was willing to buy down there in size, and the sellers who went there did not get to keep the ground.
The few worth knowing
Dozens have names; a handful describe genuinely different situations:
- Pin bar / hammer — small body, long wick. Price was rejected from a level. The longer the wick relative to the body, the more decisive the rejection.
- Engulfing — a candle whose body swallows the previous one. The period completely reversed the previous period's work.
- Doji — open and close nearly equal. Neither side won; on its own it means indecision, which is why it matters only at an extreme.
- Inside bar — the whole candle sits inside the previous range. Compression, often before an expansion.
The same shape, opposite meanings
A hammer at the bottom of an extended decline, into a level, on high volume, is a rejection worth reading. The identical hammer in the middle of a quiet range is noise with a name.
This is the single most common mistake with candlesticks: treating the shape as the signal. The shape is the smallest part. Where it happened, on what volume, into which level — that is the signal.
Why the timeframe decides the weight
A pin bar on the daily chart summarises a whole day of rejection by real size. The same shape on a one-minute chart summarises sixty seconds and is mostly randomness.
The terminal scores patterns with a reliability percentage for this reason — the shape alone is not enough, and neither is the trader's enthusiasm for having spotted one.
Common questions
- Do candlestick patterns work?
- They describe what happened inside a period, which is real. As standalone signals they are weak: the same shape means opposite things depending on where it appears and on what volume.
- Which pattern is the most reliable?
- None in isolation. A rejection wick at a tested level with volume behind it is worth attention; the identical wick mid-range is not. Reliability comes from location, not from the shape.
- What timeframe should I read them on?
- The higher the timeframe, the more real activity the shape compresses. A daily pin bar summarises a day of decisions; a one-minute one mostly summarises noise.