Learn Candlestick Patterns – Guide

Japanese Candlestick Explanation

  • Definition: Japanese candlestick is a price chart in trading platforms. They are used to display prices for a certain period. They are showing open, close, high, and low in a specific period.

Explained

  1. If the price closes above the open, then we have to buy a (long) candlestick. On our charts, it is a green candle.
  2. If the price closes below the open, then we have to sell a (short) candlestick In our examples it is the red candlestick.
  3. The center (filled part) is called the body.
  4. Thin lines up and down are called shadows.
  5. The upper shadow is high (the highest price reached in that period)
  6. Lower shadow represents low (the lowest price in that time frame).

There are three main categories of Japanese Candlestick Patterns.

  • Bullish Reversal Candlestick Patterns.
  • Bearish Reversal Candlestick Patterns.
  • Continuation Candlesticks.

Bullish Reversal Patterns

  1. Hammer
  2. Piercing Pattern
  3. Bullish Engulfing
  4. The Morning Star
  5. Three White Soldiers
  6. White Marubozu
  7. Three Inside Up
  8. Bullish Harami
  9. Tweezer Bottom
  10. Inverted Hammer
  11. Three Outside Up
  12. On Neck Pattern
  13. Bullish Counterattack

Bearish Reversal Patterns

  1. 14. Hanging man
  2. 15. Dark Cloud Cover
  3. 16. Bearish Engulfing
  4. 17. The Evening Star
  5. 18. Three Black Crows
  6. 19. Black Marubozu
  7. 20. Three Inside Down
  8. 21. Bearish Harami
  9. 22. Shooting Star
  10. 23. Tweezer Top
  11. 24. Three Outside Down
  12. 25. Bearish Counterattack

Continuation Patterns

  1. 26. Falling Three Methods
  2. 27. Rising Three Methods
  3. 28. Upside Tasuki Gap
  4. 29. Downside Tasuki Gap
  5. 30. Mat Hold
  6. 31. Rising Window
  7. 32. Falling Window

Neutral Candlesticks Patterns

  1. 33. Doji
  2. 34. Spinning Top