Candle Patterns

A candlestick pattern is a specific formation of one or more candlesticks on a chart that traders use to analyse potential future market movements. These patterns can signal buying or selling opportunities, providing insight into the market sentiment.

There are various types of candlestick patterns, each having different implications depending on their context within broader price trends. These patterns are typically divided into bullish (suggesting an upward price movement), bearish (suggesting a downward price movement), and neutral categories.

Bullish patterns include the ‘Hammer’, ‘Bullish Engulfing’, and ‘Morning Star’, while bearish patterns include the ‘Hanging Man’, ‘Bearish Engulfing’, and ‘Evening Star’.

Neutral patterns, such as ‘Dojis’ and ‘Spinning Tops’, can indicate indecision in the market, potentially signalling a change in the current trend.

Candlestick patterns

There are many Candlestick chart patterns however use the “Keep it simple, stupid” (KISS – most systems are more robust if they are kept simple rather than made complicated) principal to understand just the key patterns on a Candlestick chart and apply them within market context.

Here are our top 9 (in no particular order)…