35 Powerful Candlestick Patterns PDF Download

This 35 powerful candlestick patterns pdf download can give you the lowdown on 35 proven candlestick patterns that have withstood the test of time. You get more than just a basic rundown; this guide goes in-depth. It includes charts, how to understand them, and tactics for making the most of these patterns in your trading. It prepares you to read each pattern expertly and use that skill in real-world trading.

What You Will Learn

From simple basics to intricate designs, the “35 Powerful Candlestick Patterns PDF Download” covers it all. This all-inclusive handbook dives into the psychology behind each pattern, shows you how to recognize them on graphs, and gives you tactics to include them in your trading strategy.

Key Takeaways

• The PDF offers an in-depth look into what candlestick patterns are and their crucial role in financial trading.
• They are a set of 35 specific chart patterns used in technical analysis to predict future price movements in financial markets.
• Candlestick patterns are a form of technical analysis used in trading and investing to forecast price movements.

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Top 35 Powerful Candlestick Patterns

1. Hammer

The hammer is an important candlestick shape often seen when prices are falling. It looks like a hammer with a small top and a long lower stick. This happens when sellers bring the price down, but strong buying forces push it back up to close almost where it started. This leaves a candle that has a small body and a long bottom stick, which makes it look like a “hammer.”

The hammer is viewed as a sign that the market could be about to turn around and start going up. However, traders usually wait for the next candle or use other tools to make sure this is actually happening. The hammer is a useful tool in understanding market trends. It shows a fight between people selling and buying, where the buyers win, hinting at a possible upward move.

2. Bullish Engulfing Bar

The bullish engulfing bar is a key pattern with two candles, usually appearing when a downtrend is about to end. It starts with a smaller candle showing a drop in price, followed by a bigger candle that fully covers the first one from its opening to closing prices.

This pattern suggests that the market mood could be changing from negative to positive. It’s a sign that buyers are getting the upper hand over sellers, possibly leading to an upward turn in prices.

When traders see a bullish engulfing bar, it often serves as a strong hint that the falling trend may be ending and a rising one could be starting. However, it’s usually good to check this pattern with other tools or chart patterns to be sure of the change in direction.

In short, the bullish engulfing bar is a key visual clue pointing to a likely change in market direction, where the buyers are gaining control. It’s a valuable part of technical analysis for spotting potential times to buy.

3. Piercing Pattern

The piercing pattern is a sign that prices might start going up, usually showing up when they’ve been falling. It has two candles: the first one shows a drop in prices and is followed by one that starts even lower but goes up past the middle of the first candle.

The more the second candle goes into the first one, the more likely it is that prices will go up. Ideally, the rising candle should end above the halfway point of the falling one, but not cover it completely.

This pattern tells you about a change in how traders are feeling. At first, those betting on falling prices are in control, but then the mood changes, and those betting on rising prices take over. This switch makes the piercing pattern a useful tip for traders.

4. Three White Soldiers

The three white soldiers is a pattern of three long candles going up in price, often seen as a strong clue that a downward trend could be flipping. Each of these candles starts within the last one and ends almost at its highest point, with little or no upper stick.

This usually shows up when prices have been dropping and marks a strong change, with sellers losing ground to buyers. Each candle ends higher than the last, showing growing interest in buying. Here’s what each candle means:

First Candle: A long upward candle after prices have been falling, hinting at a possible turnaround.
Second Candle: Another long upward candle that starts within the first and ends even higher, making the upward trend more likely.
Third Candle: The last long upward candle that makes the change in direction even more certain, starting within the second and closing almost at its peak.

The three white soldiers is seen as a strong sign that a new upward trend could be starting, especially when it comes after a long period of falling prices. It’s one of the most reliable clues for traders to look out for.

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5. Three Inside Up

The three inside up is a pattern of three candles that often hints at prices moving up. It’s seen as a strong clue that the market could be shifting in a positive direction. Here’s how to spot it:

First Candle: This is a long downward candle that usually comes at the end of a period where prices have been falling. It’s like the opening act for a possible change in direction.
Second Candle: This is an upward candle that starts lower than where the first one ended and closes within the first candle. It suggests a turn might be coming but doesn’t confirm it.
Third Candle: This last upward candle starts and ends above the second one, sealing the deal on the upward trend.

This pattern shows that traders are changing their minds from being pessimistic to optimistic. After the first downward candle, the second one starts to tip the scales towards buying rather than selling. The third candle confirms this change, indicating that those buying are now in the driver’s seat.

Traders often look for this pattern as a hint that the trend might be flipping from down to up. However, as with all such patterns, it’s best to check it against other indicators to make sure you’re reading it right.

6. White Marubozu

The White Marubozu is a single candle pattern that’s seen as a strong hint that prices will keep going up. Here’s what you should look for in this pattern:

Color: The candle is green, which means the price ended up higher than where it started.
No Upper or Lower Shadow: Unlike most candles that have either a higher or lower tail, this one doesn’t have any. Both the high and low prices are the same as the start and end prices.

This pattern shows that the buyers were in charge from the moment the market opened until it closed. They didn’t let the sellers bring the price down at all during that time.
In trading, if you see a White Marubozu, it’s often a big clue that prices will keep going up. However, it’s always good to double-check with other indicators to be sure. Many traders find this pattern super useful for predicting uptrends.

7. Bullish Harami

The Bullish Harami is a two-candle pattern that might signal a change from a falling market to a rising one. The first candle is a big one that shows a drop in price, and the second, smaller one shows an increase.

The smaller candle fits inside the big one, just like a baby inside a pregnant woman, which is what “Harami” means in Japanese. This suggests that the falling trend may be slowing down, and the rising trend might be starting.

Even though this pattern hints at a possible uptrend, it’s not as strong a clue as some other patterns. Thus, it’s smart to double-check with other signs or wait for more positive candles to confirm. Usually, you’ll find this pattern when prices have been dropping and could be about to start climbing.

8. Inverted Hammer

The inverted hammer is a single-candle pattern that often shows up when a market is going down but could be about to go up. This candle has a small body at the bottom and a long upper wick, with almost no wick at the bottom.

The long upper wick shows that buyers tried to push prices up, but sellers pulled them back down again. This tells us there’s a tug-of-war happening between the buyers and sellers. When you see this pattern after prices have been falling for a while, it could mean that sellers are losing their grip and buyers are getting ready to take over.

It’s a clue that there might be a market turnaround. However, you’ll want to see what the next candle does before making any decisions. If the next candle goes up and closes higher than the body of the inverted hammer, that’s a good sign that the market could really be turning around. Like always, it’s smart to look at other signs or indicators to make sure.

9. Tweezer Bottom

The tweezer bottom is a pattern you might see when the market is going down but could be getting ready to go up. It shows up as two candles that line up perfectly at their lowest points. The first candle is generally going down, following the current market trend. The second candle is going up, hinting that things might be about to change.

The pattern gets its name because the two low points of the candles look like the tips of a pair of tweezers. This could be a clue that the people selling are losing power, and the people buying are stepping in.

To be sure this is a real sign of change, you need to watch the next few candles closely. If you see more candles going up, that could mean the tweezer bottom was a real sign that the market is changing direction. As always, this pattern works best when you look at it along with other ways of analyzing the market. It helps traders decide when might be a good time to buy.

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10. Three Outside Up

The three outside up is a pattern that suggests the market might be about to go up. It shows up as three candles on a chart. It consists of three candles:

First Candle: A bearish candle in a prevailing downtrend.
Second Candle: A bullish candle that completely engulfs the first one, signifying that buyers are starting to take control.
Third Candle: Another bullish candle that closes higher than the second, confirming the bullish momentum.

This pattern usually pops up when the market has been going down for a while, and it can be a sign that things are about to turn around. It’s an especially good sign if you see this pattern where the stock has support levels.

Traders often use this as a heads-up that it might be a good time to buy or to stop selling short. Remember, you should always check other signs and indicators to make sure you’re reading the pattern correctly.

11. Bullish Counterattack

The bullish counterattack is a two-candle pattern that hints at a possible market turnaround. The first candle shows a strong push downward, signaling that sellers are in control. However, the second candle starts at or even below where the first one ended and fights its way back up, closing at the same level as the first candle’s opening.

This action indicates that the buyers are fighting back, taking control from the sellers. It’s like a signal flare, suggesting that the market’s downward trend may be ending and an upward swing could be coming. Traders often view this pattern as a go-ahead for buying into the market, but it’s crucial to use other tools or signs to validate this signal.

12. Rising Three Methods

The rising three methods is a pattern made up of five candles that signals a strong chance of a continuing uptrend. The pattern starts with one long green candle, followed by three smaller candles that are either red or neutral. These smaller candles stay within the first green candle’s price range.

The pattern ends with another long green candle, which closes at a higher price than the first one. This pattern suggests that the ongoing upward movement in price is likely to keep going. The three small candles in the middle are like a brief pause, but they don’t signal a reversal.

The last long green candle confirms that the uptrend is still strong. Since this pattern can appear in various time frames, it’s useful for different trading approaches.

13. Morning Star

The morning star is a pattern made of three candles that hints at the end of a downward price trend and the start of an upward one. The first candle is a long red one, showing that sellers are driving the price down. The second candle is small and can be either red or green, symbolizing market uncertainty. It usually doesn’t touch the first candle.

The last candle is a long green one, indicating that buyers have taken the lead and are pushing the price up. This pattern is a strong clue that the market mood is switching from pessimistic to optimistic. It’s most reliable when it appears after a long period of falling prices and is backed by a high number of trades on the last candle or by more green candles that follow.

14. Hanging Man

The hanging man is a single-candle pattern that usually shows up when prices have been rising and hints at a possible downward turn. This candle has a small body, which can be either red or green, and a long lower shadow that looks like a hanging man. Here’s what you need to know:

Small Body: The body’s color doesn’t really matter, but it’s usually small.
Long Lower Shadow: This should be at least double the size of the body.
Short or Absent Upper Shadow: Typically, there’s little or no upper shadow.

The name might sound bad, but the hanging man doesn’t guarantee that prices will drop. It just suggests that the buyers are losing their grip and that prices might start to fall. It’s a good idea to look for more clues in the next candles or use other tools to confirm this.

15. Bearish Engulfing Bar

The bearish engulfing bar is a pattern made of two candles that hints at a shift from a rising to a falling market trend. The first is a small upward-moving candle, followed by a much bigger downward-moving candle that completely covers the first one. This pattern is often a red flag for traders, signaling that the upward trend may be coming to an end and a downward trend might start.

This pattern gets even more attention when there’s a lot of trading going on. It usually shows up at the highest point of an uptrend, indicating that the sellers are gaining ground and the buyers are losing it.

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16. Three Black Crows

The three black crows is a bearish candlestick pattern featuring three successive long, black or red candles. Each candle opens within the previous one’s body and closes at a lower point, showcasing intense selling activity.

Often seen after an upward trend, this pattern suggests that the bears are now in charge, signaling a likely downturn or significant bearish move ahead.

17. Black Marubozu

The black marubozu is a red or black candle with a long body and almost no wicks, often seen in stock or currency markets. This pattern indicates that sellers controlled the market for the entire trading session, pushing prices down from start to finish.

It’s a strong clue that the market may continue to fall or even reverse its current upward trend. To be more certain, traders usually look for this pattern along with other signs or high trading volumes.

18. The Evening Star

The evening star is a three-candle bearish reversal pattern commonly seen at the peak of an uptrend, hinting at a possible trend shift. The pattern is composed of three candles:

First Candle: It is a large bullish candle that reflects the strength of the existing uptrend.
Second Candle: It is a small-bodied candle, often a Doji or a Spinning Top, that gaps above the close of the first candle. This candle suggests uncertainty or indecision in the market.
Third Candle: It is a large bearish candle that opens below the close of the second candle and moves down to close well within the body of the first candle, confirming the reversal.

This pattern strongly suggests that control is shifting from the bulls to the bears, making it a key signal for traders considering exiting long trades or initiating short positions.

19. Three Inside Down

The three inside down is a pattern made up of three candles and usually indicates that a rising trend may soon go downward. This pattern often pops up after prices have been climbing, suggesting that they may start to fall soon. The pattern is composed of three candles:

First Candle: It is bullish, usually green or white, continuing the existing upward momentum.
Second Candle: It is a bearish candle that opens above the high of the first but closes below its close, indicating a mood shift in the market.
Third Candle: It is also bearish, opening below the second’s open and closing beneath its close, validating the trend reversal.

The three inside down pattern shows that the upward trend is losing steam and that those betting on falling prices are starting to have the upper hand. This makes the pattern handy for traders thinking about selling their stocks or betting on a price drop.

20. Shooting Star Candle

The shooting star candle is a signal that warns of a possible switch from rising to falling prices. Usually found at the peak of an upward trend, this single candle pattern has specific features that traders watch for. The pattern consists of a single candle with the following characteristics:

A Small Real Body: It is at the lower end of the candle, indicating the opening and closing prices.
A Long Upper Wick: It is usually at least twice the size of the real body, suggesting that the price reached significantly higher levels during the time period but was pushed back down.
A Small or Nonexistent Lower Wick: It suggests limited downward movement during the time period.

The shooting star candle shows that even though buyers initially drove the price higher, sellers stepped in and brought it back down close to where it started. This change in market mood is often a red flag that the rising trend might be ending soon. It’s a helpful hint for traders thinking about selling their shares or taking on short positions.

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21. Bearish Harami

The Bearish Harami is a sign in candlestick charts that suggests a likely change from an uptrend to a downtrend. The pattern consists of two candles:

First Candle: It is a large bullish one, representing the continuation of the existing uptrend.
Second Candle: It is a smaller bearish one that is completely engulfed by the body of the first candle. It opens above the first candle’s close and closes below its open, but within the body of the first candle.

The name “Harami” comes from an ancient Japanese term meaning “pregnant.” The pattern looks like a pregnant woman, with the first candle as the “mother” and the second one as the “baby.” This pattern indicates that the upward trend might be running out of energy and a downward turn could be coming soon.

22. Tweezer Top

The tweezer top is a pattern that suggests a market trend might flip from going up to going down. This pattern is made of two candles and usually shows up after prices have been rising for a while:

First Stick: A bullish candle that maintains the current upward trajectory.
Second Stick: A bearish one that starts at a fresh peak but then backpedals, negating the advances of the first candle.

In the tweezer top pattern, both candles reach the same high price point, making it look like a set of tweezers. This unique feature distinguishes it from other patterns signaling a downward turn. The pattern implies that the upward trend is losing steam, hitting a wall it can’t get past. This could mean the market is gearing up for a shift in a downward direction.

23. Bearish Counterattack

The bearish counterattack is a two-candle pattern that usually shows up when prices are rising, suggesting that they might start falling soon. This pattern serves as a red flag for a potential change from a bullish to a bearish market. Here’s how it breaks down:

First Candle: A bullish candle, confirming the ongoing rise in the market.
Second Candle: A bearish one, which kicks off at or above the closing price of the prior candle but wraps up near or at the same level where the first candle began.

Basically, the second candle reverses the upward trend set by the first one, pulling prices back to where the rise began. This hints that the bears are gaining control, so it’s a key pattern for those thinking of selling or leaving their long positions. It shows a major change in how the market feels.

24. Falling Three Methods

The falling three methods is a pattern you’ll often see when prices are already going down, suggesting that this downward trend is likely to keep going. This pattern is made up of five candles:

A Long Bearish Candle: It indicates strong selling pressure and confirming the ongoing downtrend.
A Small Bullish Candle: It is that gap down from the first candle but does not exceed its range, suggesting a brief pause or consolidation.
Another Small Bullish Candle: It is further confirming the consolidation.
Another Small Bullish Candle: It makes a total of three small bullish candles.
A Long Bearish Candle: It is that closes below the first candle’s low, signaling a resumption of the downtrend.

The three little green candles in the middle show a short break or minor recovery in a market that’s mainly dropping. The last long red candle says that the sellers are back in charge. Usually, this pattern is a solid hint that prices are going to keep going down.

25. Dark Cloud Cover

The dark cloud cover is a pattern of candlesticks that usually shows up after prices have been rising and suggests that the market mood may be turning negative.

First Candle: The first candle in the dark cloud cover pattern is a bullish candle, which means it has a higher close than open. It ideally has a long body, representing strong bullish sentiment.
Second Candle: The key point of the second candle is that it should start higher than the top point of the first candle but close below its midpoint. This shows that the gains made previously are being reversed, giving the “dark cloud cover” its name.

When traders spot a dark cloud cover, it’s generally seen as a warning that the upward trend may be ending. It indicates that the ones driving up the price, known as the bulls, are losing their grip while those betting on a price drop, the bears, are gaining power. This can mean a switch from an upward to a downward trend, or at least a pause in the price climb.

26. Doji

The Doji is a chart pattern often seen as neutral because it suggests the market can’t make up its mind. It’s just one candle with a really tiny body, meaning the opening and closing prices are almost the same. The long or short ‘wicks’ on the candle can vary, but the main point is that neither buyers nor sellers could really take control in that trading session.

A Doji can show whether prices have been going up or down, and what it means depends on what’s been happening with the price before and what happens next. If you see a Doji after prices have been rising, it might mean that the upward trend is running out of steam and things might start to go down. On the flip side, if it shows up after prices have fallen, it could be a sign that things are about to turn around and start going up.

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27. Spinning Top

The spinning top is another candlestick pattern that points to market uncertainty, much like the Doji. However, there’s a small difference: a spinning top has a slight body, meaning the opening and closing prices aren’t the same but are still close. Both the top and bottom ‘wicks’ of the candle are about equal in length. This shows that both buyers and sellers were trying hard but no one really won out.

Like the Doji, you can find this pattern when prices are going up or down. If it shows up during a time when prices have been rising, it could hint that the upward trend might be weakening and a drop could be coming. On the other hand, if it appears when prices have been going down, it might signal that the sellers are running out of energy and prices could start rising soon.

28. On-Neck Pattern

The on-neck candlestick pattern usually signals that a downward trend in the market will keep going. It’s made up of two candles. The first is a long one pointing down, and the second is a smaller one pointing up. The second candle starts lower than where the first one ended and closed nearly where the first one was at its lowest, basically “sitting on its neck,” hence the name.

This pattern shows that although the market tried to go up, it couldn’t. It ended up nearly where it started, indicating that those selling are still in the driver’s seat. The on-neck pattern is more trustworthy when seen in a clear downtrend and when other indicators or lots of trading activity back it up. Traders often use this pattern as a go-ahead to keep or start selling, but they also look for extra signs to make sure they’re reading it right.

29. Falling Window

The falling window, also known as a “gap down,” shows a strong move downward in the market. This happens when the highest price of a candle is even lower than the lowest price of the candle before it, leaving an empty space or “gap” in the chart. This is mostly seen during times when the market is going down and is usually seen as proof that this downward trend will continue.

The bigger this gap is, the stronger the sign is considered. This pattern tells us that those who are selling are calling the shots and the price will probably keep going down. The falling window can happen in various market conditions and time frames. However, traders often look for the following candle that closes within this gap as a clue that the trend might change or the gap might close.

30. Rising Window

The rising window, commonly called a “gap up,” points to a strong upward shift in the market. This pattern shows up when the lowest price of one candle is even higher than the highest price of the previous candle, making a gap or empty space on the chart. This is usually seen when prices are going up and confirms that this upward trend will likely keep going.

The pattern tells us that the buyers have the upper hand and suggests that the price of the asset will likely keep rising. This can happen in different market settings and time frames. However, traders usually watch the next candles closely to see if they close within this gap, which could indicate that the trend might reverse or the gap might get filled.

31. Rising Three Methods

The rising three methods is a pattern in candlestick charts that suggests the current upward trend is likely to keep going. The pattern has five candles in total: the first is a long one pointing up, followed by three smaller candles that can be either up or down, and it ends with another long upward candle.

The main idea is that even though there might be a bit of downward movement or pause (shown by the three smaller candles), the overall trend is still bullish. This is proven by the last big upward candle. This pattern is a good sign for people looking to buy or hold onto stocks in an already upward-moving market.

32. Mat Hold

The mat hold pattern is another sign in candlestick charts that tells investors the market is still going up. The pattern has five candles. The first one is a big upward candle, and it’s followed by three smaller candles that could be going either up or down but stay within the first big candle’s range. The pattern ends with another large upward candle that closes at a higher point than the first one.

This pattern tells us that even if there’s a slight drop or pause in the market (shown by the three middle candles), the strong upward trend is still there. This is backed up by the last big upward candle, which often ends at a new high point. For traders looking to buy or keep their stocks, seeing a Mat Hold pattern can be a green light to go ahead.

33. Upside Tasuki Gap

The Upside Tasuki Gap is a three-candle pattern in stock charts that hints the market will likely keep climbing. It starts with one big upward-moving candle, followed by another that rises even higher, leaving a gap between them. The last candle drops a bit but doesn’t close the gap entirely.

This pattern indicates that even if there’s a slight downward turn on the third day (shown by the last candle), the overall market mood is still positive. The fact that the gap isn’t closed by the last candle proves that the upward trend remains strong. Thus, for those looking to buy or keep their stocks, this pattern usually suggests it’s a good idea.

34. Downside Tasuki Gap

The Downside Tasuki Gap is a pattern in candlestick charts that indicates the market is probably going to keep dropping. This pattern has three candles. The first is a big downward one, followed by another that drops even lower, leaving a space between them. The third candle goes up a bit but doesn’t completely close the gap.

This pattern shows that even if the market goes up a little on the third day (as indicated by the last candle), the general trend is still down. The gap remaining open means that the downward trend is still in play. Thus, for people who want to sell or short their stocks, this pattern often says it’s safe to go ahead.

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35. High Wave

The hgh wave pattern is a single candle in a stock chart that tells us the market can’t make up its mind. This candle has a small body with long lines sticking out from both ends, showing that prices went up and down a lot, but in the end, didn’t change much.

This pattern can appear when the market is either going up or down and serves as a heads-up that things might be about to change. However, it doesn’t tell us which way things will go, just that people are unsure about the stock’s value. Therefore, traders usually wait for more signs or use other tools to figure out what’s likely to happen next.

Conclusion

In short, there are 35 powerful candlestick patterns that can help you understand what the market is feeling and where prices might go. These patterns range from simple single-candle ones like the Doji to more complicated ones involving multiple candles, like the three white soldiers.

Candlestick patterns offer hints on whether the market is more likely to go up or down. This 35 powerful candlestick patterns PDF download can help you decide the best time to buy or sell stocks. While they’re reliable for figuring out market trends, they’re not 100% accurate. Thus, it’s good to also use other methods like trend lines or moving averages for a fuller picture.

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