35 Powerful Candlestick Patterns in the Stock Market

  • 17 Jan 2024
  • Read 23 mins read

Candlestick chart patterns are technical tools that outperform typical open, high, low, and close (OHLC) bars or simple lines connecting closing price dots. Candlestick Patterns create patterns that anticipate price direction once finished. Candlestick patterns are used to anticipate future price changes. Candlestick designs are created by arranging two or more candlesticks together. Candlestick chart patterns work best daily. The theory is that each candle represents a complete day's worth of news data and price activity, which is why candlestick patterns benefit long-term or swing traders more.

In this article, we will go over all 35 powerful candlestick patterns, but first, let us learn how to interpret candlestick charts.

35 Powerful Candlestick Patterns 

Here are 35 powerful candlestick patterns for day trading, divided as: 
 

Bullish 

Bearish 

Continuation 

HammerHanging ManDoji
PiercingDark Cloud CoverSpinning Top
Morning Star PatternBearish EngulfingFalling Three Methods
Three White SoldiersEvening StarRising Three Methods
White MarubozuThree Black CrowsUpside Tasuki Gap
Three-Insides-UpBlack MarubozuDownside Tasuki Gap
Bullish HaramiThree Inside DownMat Hold
Tweezer BottomShooting StarRising Window
Inverted HammerTweezer TopFalling Window
Three Outside UpThree Outside DownHigh Wave
On-Neck PatternBearish Counter-Attack
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Bullish Counterattack
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Bullish Candlestick Patterns

These all are bullish candlestick patterns:  

  1. Hammer Candlestick Pattern: A Hammer candlestick pattern is a price pattern in candlesticks that occurs when a securities trade much lower than its initial price but rises within a period close to the opening price. This design is known as the hammer candlestick pattern. In this design, we see a hammer-shaped candlestick with a lower shadow that is at least double the size of the actual body.  The candlestick body reflects the difference between the starting and closing prices. The shadow depicts the peak and low periods. 
     
  2. Piercing Candlestick PatternPiercing Patterns are several candlestick pattern that appear following a decline and indicate a bullish turnaround. It comprises two candles, the first of which is bearish and signals that the decline will continue. The second one is bullish. The second one reduces the gap but only covers more than half of the previous one's actual body. This indicates that the bulls are in the market, and a positive reversal is underway.  
     
  3. Bullish Engulfing Candlestick Pattern: The bullish engulfing candle comes at the bottom of a downtrend, indicating increased purchasing pressure. The bullish engulfing pattern frequently results in a trend reversal as additional buyers enter the market, driving prices upward. The pattern consists of two candles, with the second entirely swallowing the body of the preceding red candle. 
     
  4. Morning Star Candlestick Pattern: The Morning Star pattern is another multiple candlestick chart that forms after a negative trend and signals a bullish turnaround. Made up of three candlesticks: the first is bearish, the second is a Doji, and the third is bullish. The first candle represents the continuance of a downward trend, while the second suggests market hesitation. The third bullish candle indicates that the bulls are poised to reverse the market. In this situation, the second candle must be fully separated from the true body of the first and third candles. 
     
  5.  Three White Soldiers Candlestick Pattern: The three white soldiers pattern is a bullish candlestick formation on a trading chart that appears near the bottom of a downward trend. As the name implies, the design comprises three green candles. Because of the high purchasing demand, traders believe this pattern foreshadows impending price reversals. These candlestick patterns consist of three bullish bodies with no extended shadows that are open within the true body of the previous candle in the sequence. 
     
  6.  White Marubozu Candlestick Pattern: The White Marubozu is a single candlestick pattern that forms after a decline and signals a bullish reversal. This candlestick has a lengthy bullish body and no upper or lower shadows, indicating that bulls are exerting purchasing pressure and the markets may turn bullish. This single-stick pattern is generated during a negative trend and suggests a bullish reversal. 
     
  7. Three-Insides-Up Candlestick Pattern: The three insides up is a multi-candlestick pattern that emerges after a downward trend. It consists of three candlesticks: the first is a bearish candle, the second is a modest bullish candle inside the range of the first, and the third is a lengthy bullish candle that confirms the bullish reversal. The connection between the first and second candlesticks should follow the bullish Harami candlestick pattern. Traders might take a long trade after this candlestick pattern is completed. 
     
  8. Bullish Harami Candlestick Pattern: The Bullish Harami is a multiple candlestick chart pattern developed after a downturn and indicates a bullish turnaround. It comprises two candlestick charts, the first a towering bearish candle and the second a little bullish candle that should be inside the first candlestick's range. The first negative candle represents the continuance of the bearish trend, while the second candle indicates that bulls have returned to the market. This multi-candle chart pattern consists of two candlesticks: the first is a towering bearish candlestick, and the second is a little bullish candlestick that is within range of the first. The first candlestick represents a continuation of the negative trend, whilst the second indicates that bulls have returned to the market.  
     
  9. Tweezer Bottom Candlestick Pattern: A tweezer bottom pattern occurs when two candlesticks establish two identical support levels, resulting in a reversal in a downtrend. This pattern might appear during a turning point or a stock reversal. It enables precision trading and dip buying situations. Tweezer bottoms are generally seen during a stock's downturn. Once a tweezer bottom is established, traders should watch for a reversal for the price to rise. Before initiating a trade, confirm with further indications and develop an entry, exit, and stop-loss strategy. A game plan enables traders to stay in a transaction and regulate their emotions. 
     
  10. Inverted Hammer Candlestick Pattern: The inverted hammer candlestick pattern (the inverse hammer) emerges on a chart when buyers exert pressure to drive an asset's price upward. It frequently appears near the bottom of a downtrend, indicating a possible bullish reversal. The inverted hammer pattern derives its name from its form, which resembles an upside-down hammer. To recognise an inverted hammer candle, look for a large top wick, a short lower wick, and a tiny body. 
     
  11. Three Outside Up Candlestick Pattern: The Three Outside Up pattern is a bullish trend reversal with three candles. A bearish candlestick pattern is followed by a bullish candlestick pattern that begins below the closing price and ends above the opening price of the preceding candlestick pattern. In other words, the second bullish candle stick formation engulfs the prior bearish candlestick pattern. The Three Outside Up pattern is a Bullish Engulfing pattern with a breakout in the next candle. This pattern is more robust than the Bullish Engulfing pattern. 
     
  12.  On-Neck Pattern Candlestick Pattern: An on-neck candlestick pattern forms when a long bearish candlestick is followed by a tiny bullish candlestick that follows a downtrend and opens and closes near the preceding candlestick's closure. The on-neck pattern forms after a downtrend when a lengthy real-bodied bearish candle is followed by a smaller real-bodied bullish candle that gaps down on the open but closes around the preceding candle's close. The pattern is known as a neckline because the two closing prices are the same or nearly the same across both candles, producing a horizontal neckline. 
     
  13. Bullish Counterattack Candlestick Pattern: A bullish Counterattack is a reversal pattern that indicates that the market's current decline will reverse in the future. This pattern is a two-bar chart that arises during a market decline. To constitute a bullish reversal pattern, the following requirements must be met: There must have been a significant decreasing trend. Then a strong positive candle emerges. The second candlestick must be a lengthy (preferably the same size as the first) green candlestick with a real body; close it much above the first candle's closure. 

Bearish Candlestick Pattern

These all are the bearish candlestick pattern:

  1. Hanging Man Candlestick Pattern: The Hanging Man is a single candlestick pattern that appears after an uptrend and indicates a bearish reversal. The real body of this candle is tiny and located at the top, with a lower shadow that should be twice the size of the actual body. This candlestick design has minimal to no top shadow. Hanging Man is a single candlestick pattern that occurs at the end of an upswing. This candlestick design has no or little top shadow. The psychology behind this candle formation is that the prices opened, and the seller pushed them down. Buyers suddenly entered the market and drove prices higher, but they were unsuccessful, as prices closed lower than the starting price. 
     
  2. Dark Cloud Cover Candlestick Pattern: The Dark Cloud Cover candlestick pattern represents a bearish reversal following an upswing. It is made up of two candles, one with a bullish candle signalling the continuation of the uptrend and the other with a bearish candle that gaps to the upside but closes more than half of the preceding candle's body, suggesting a bearish reversal. This pattern is easily recognised on Japanese candlestick charts because it occurs when a down candle opens above the closing of the previous up candle and closes below the middle of the up candle. 
     
  3. Bearish Engulfing Candlestick Pattern: Bearish engulfing is a candlestick pattern that occurs after an upswing and signals a bearish reversal. It is composed of two candlesticks, with the second candlestick enveloping the first. The first candle is bullish and signals the continuation of the rise. The second candle on the chart is a lengthy bearish candle that engulfs the first, indicating that bears have returned to the market. 
     
  4.  Evening Star Candlestick Pattern: The Evening Star candlestick pattern is formed after an upswing and suggests a bearish reversal. It consists of three candles: the first is a bullish candle, the second is a doji, and the third is bearish. The first candle shows the continuance of the uptrend; the second candle, a doji, represents market hesitation; and the third candle, a bear market, signifies that the bears have returned to the market and a reversal will occur. 
     
  5.  Three Black Crows Candlestick Pattern: The Three Black Crows is a multiple candlestick pattern that appears after an uptrend and signals a negative reversal. These candlesticks are composed of three lengthy bearish bodies with no long shadows and open within the body of the preceding candle in the pattern. 
     
  6. Black Marubozu Candlestick Pattern: The Black Marubozu is a single candlestick pattern that appears following an upswing and signals a negative reversal. This candlestick pattern has a lengthy bearish body and no upper wick or lower shadow, indicating that the bears may be selling and driving the markets lower. Buyers should be cautious and close their purchasing positions when this candle forms 
     
  7.  Three Inside Down Candlestick Pattern: Three Inside Down is a multi-candlestick pattern that appears after an upswing and signals a downward reversal. It consists of three candlesticks: the first is a long bullish candle, and the second is a little bearish candlestick that should be inside the range of the first. The third candlestick chart should show a lengthy bearish candlestick, confirming the bearish reversal. The first and second candlesticks should form a bearish Harami candlestick pattern. 
     
  8. Bearish Harami Candlestick Pattern: The negative Harami candlestick pattern occurs after an upswing and suggests a negative reversal. It comprises two candles, the first of which is a high bullish candle and the second of which is a little bearish candle, both of which should be located in the first candlestick chart.  The first bullish candle represents the continuance of the bullish trend, while the second candle indicates that bears have returned to the market. 
     
  9.  Shooting Star Candlestick Pattern: The Shooting Star appears at the end of an uptrend and is a negative reversal indicator. In this candlestick chart, the true body is near the end, with a long upper wick.  
     
  10.  Tweezer Top Candlestick Pattern: The tweezer top candlestick pattern is a bearish candlestick shape that appears after an upswing. It consists of two candles, the first bullish and the second bearish. Both tweezer candles provide practically identical highs. When the tweezer top candlestick pattern appears, the prior trend is upward. A bullish candle is a pattern that seems to be the continuation of an existing upswing. The Tweezer Top pattern is a bearish reversal candlestick pattern that appears after an uptrend. 
     
  11. Three Outside Down Candlestick Pattern: The Three Outside Down candlestick formation occurs after an upswing and signals a negative reversal. It consists of three candles: the first is a short bullish candle, and the second is a massive bearish candle that should cover the first. The third candle should be a lengthy bearish candle, which confirms the bearish reversal. 
     
  12. Bearish Counter-Attack Candlestick Pattern: The Bearish Counter-attack The candlestick pattern is a negative reversal pattern during a market uptrend. It indicates that the market's current upswing will expire and a new decline will take over.

Continuation Candlestick Pattern

Here are the continuation candlestick patterns: 

  1.  Doji  Candlestick Pattern: The doji pattern is an uncertain candlestick pattern formed when the starting and closing prices are about identical. It forms when both bulls and bears compete for price control, but none succeeds in acquiring complete control. 
     
  2.  Spinning Top  Candlestick Pattern: The spinning top candlestick pattern, like the doji pattern, shows market indecision. The sole distinction between the spinning top and the doji is in their formation; the spinning top has a bigger actual body than the doji. 
     
  3.  Falling Three Methods Candlestick Pattern: The falling three ways is a bearish five-candlestick continuation pattern that suggests a break but no reversal in the current decline. The candlestick pattern is made up of two long candlestick charts in the direction of the trend, i.e. a decline at the start and finish, and three shorter candlesticks in the middle to offset the downtrend. The "falling three methods" is a bearish, five-candle continuation pattern that indicates a break, but not a reversal, in the current downturn. The candlestick pattern consists of two long charts in the direction of the trend (downtrend) at the beginning and conclusion, and three shorter counter-trend candlesticks in the centre. 
     
  4. Rising Three Methods Candlestick Pattern: The "Rising Three Methods" is a bullish five-bar continuation pattern that indicates a break, but not a reversal, in the current uptrend. This candlestick pattern consists of two long candlesticks in the direction of the trend, which is an uptrend, at the beginning and conclusion, and three shorter candlesticks in the centre that are contrary to the trend. 
     
  5. Upside Tasuki Gap Candlestick Pattern: Upside Tasuki is a bullish continuation candlestick pattern generated during an upswing. This candlestick configuration consists of three candles. The first candle is an extended bullish candle, and the second candle forms following an upward gap. It is a bullish continuation candlestick pattern generated during a continuing upswing. 
     
  6. Downside Tasuki Gap Candlestick Pattern: It is a bearish continuation candlestick pattern generated during a continuing decline. This candlestick pattern consists of three candles: the first is a long-bodied bearish candlestick, and the second is a bearish candlestick developed after a gap down. The third candlestick is a bullish candle that closes the gap produced by the previous two bearish candles. 
     
  7.  Mat-Hold Candlestick Pattern: A mat-hold pattern is a candlestick shape that shows the continuance of a preceding trend. There are bullish and bearish mat-hold patterns. A bullish pattern begins with a giant bullish candle, then a gap to the upside and three smaller candles heading downward. These candles must remain above the base of the first candle. The fifth candle is a huge candle that moves back up. The pattern happens during a broad rise. 
     
  8. Rising Window Candlestick Pattern: The Rising Window candlestick pattern consists of two bullish candlesticks separated by a gap. The gap is the difference between the highs and lows of two candlesticks that result from high trading volatility. It is a trend continuation candlestick pattern that signals the market has strong buyers. 
     
  9.  Falling Window Candlestick Pattern: The falling window candlestick pattern consists of two bearish candlesticks separated by a gap. The gap is the distance between the highest and lowest points of two candlesticks. This is a trend continuation candlestick pattern indicating the market's selling power. 
     
  10. High Wave Candlestick Pattern: The high wave candlestick pattern represents indecision, indicating that the market is neither bullish nor bearish. It mostly happens at the support and resistance levels. The high wave candlestick pattern represents indecision, indicating that the market is neither bullish nor bearish. It mostly happens at the support and resistance levels. Bears and bulls compete to drive the price in a specific direction. Candlesticks show a pattern with long lower shadows and long higher wicks. Similarly, they have tiny bodies. The lengthy wicks indicate a significant amount of price movement throughout the provided time. However, the price finally closed near its opening price.

 

Conclusion - p tag

The real body of a candlestick is the broad or rectangular component that reveals the relationship between the opening and closing prices. This chart depicts the price ranges between the start and end of that day's trade. Before trading in the stock market, a trader should constantly verify the candlestick pattern. Because these charts are technical indicators that illustrate the market's performance for this analysis, you should choose a reliable online trading app.  Financial literacy and skilled assistance can help traders have a better grasp of market performance. You can check our 35 powerful candlestick patterns webstory.

FAQs on Candlestick Patterns in the Stock Market

Traders may profit from shifts in market sentiment by identifying inside candles on a 15-minute timeframe chart and trading in the direction of the breakout.

The Concealing Baby Swallow candlestick design is among the most unusual.

A short upper wick on a red candle indicates the stock opened around its daily high. In contrast, a short upper wick on a green candle indicates that the stock closed close to its daily high. 

If the real component is positive, we anticipate a bullish candlestick; if it is negative, we predict a bearish candlestick; and if it is zero, we forecast a neutral candlestick.

This trading approach seeks momentum bursts on short-term, 5-minute currency trading charts that a market player may profit from before rapidly exiting as the momentum fades.