Candlestick patterns are the foundation of price action trading, helping Forex traders predict market movements with precision. Originating from 18th-century Japanese rice traders, these patterns reveal market psychology, trend reversals, and continuations.
In this guide, you’ll learn:
✅ 35 most reliable candlestick patterns (bullish, bearish, reversal & continuation).
✅ How to read candlesticks like a pro trader.
✅ Real-world examples & trading strategies.
✅ Common mistakes to avoid.
By the end, you’ll master key price action signals to trade Forex profitably.
How to Read Candlestick Patterns
Each candlestick has 4 key components:
- Open: Starting price.
- Close: Ending price.
- High: Highest price reached.
- Low: Lowest price reached.
Bullish Candle: Close > Open (Green/White).
Bearish Candle: Close < Open (Red/Black).
35 Candlestick Patterns for Forex Trading
1. Bullish Reversal Patterns
(Signals uptrend starts after a downtrend)
1. Hammer
- Appearance: Small body, long lower wick.
- Meaning: Sellers pushed price down, but buyers reversed it.
- Confirmation: Next candle must be bullish.
2. Inverted Hammer
- Appearance: Small body, long upper wick.
- Meaning: Buyers tried to push up but faced resistance.
3. Bullish Engulfing
- Appearance: Large green candle swallows previous red candle.
- Meaning: Strong buying pressure.
4. Piercing Line
- Appearance: Green candle closes above red candle’s midpoint.
- Meaning: Potential trend reversal.
5. Morning Star
- Appearance: Small candle (doji) between long red & green candles.
- Meaning: Reversal after a downtrend.
6. Three White Soldiers
- Appearance: Three consecutive green candles.
- Meaning: Strong bullish momentum.
7. Tweezer Bottom
- Appearance: Two candles with identical lows.
- Meaning: Support level holding.
2. Bearish Reversal Patterns
(Signals downtrend starts after an uptrend)
8. Hanging Man
- Appearance: Small body, long lower wick (at the top of an uptrend).
- Meaning: Buyers losing control.
9. Shooting Star
- Appearance: Small body, long upper wick.
- Meaning: Rejection at highs.
10. Bearish Engulfing
- Appearance: Large red candle swallows previous green candle.
- Meaning: Strong selling pressure.
11. Dark Cloud Cover
- Appearance: Red candle closes below green candle’s midpoint.
- Meaning: Potential downtrend.
12. Evening Star
- Appearance: Small candle (doji) between long green & red candles.
- Meaning: Reversal after an uptrend.
13. Three Black Crows
- Appearance: Three consecutive red candles.
- Meaning: Strong bearish momentum.
14. Tweezer Top
- Appearance: Two candles with identical highs.
- Meaning: Resistance level holding.
3. Continuation Patterns
(Signals trend will continue)
15. Doji
- Appearance: Open = Close (cross shape).
- Meaning: Market indecision.
16. Spinning Top
- Appearance: Small body, equal wicks.
- Meaning: Balance between buyers & sellers.
17. Falling Three Methods
- Appearance: Long red candle, small green candles, another red candle.
- Meaning: Bearish trend continues.
18. Rising Three Methods
- Appearance: Long green candle, small red candles, another green candle.
- Meaning: Bullish trend continues.
19. Mat Hold
- Appearance: Gap up, small pullback, then continuation.
- Meaning: Strong uptrend.
20. Separating Lines
- Appearance: Opposite-colored candles with same opening price.
- Meaning: Trend resumes after brief pause.
4. Neutral/Indecision Patterns
(Signals potential reversal or pause)
21. Dragonfly Doji
- Appearance: Long lower wick, no upper wick.
- Meaning: Possible bullish reversal.
22. Gravestone Doji
- Appearance: Long upper wick, no lower wick.
- Meaning: Possible bearish reversal.
23. Long-Legged Doji
- Appearance: Long upper & lower wicks.
- Meaning: High volatility, indecision.
24. Harami
- Appearance: Small candle inside previous large candle.
- Meaning: Trend weakening.
25. Harami Cross
- Appearance: Doji inside previous large candle.
- Meaning: Strong reversal signal.
5. Advanced Candlestick Patterns
26. Marubozu
- Appearance: No wicks (full-bodied candle).
- Meaning: Strong momentum.
27. Abandoned Baby
- Appearance: Gap + doji + gap (rare but strong).
- Meaning: Major reversal signal.
28. Breakaway
- Appearance: Five-candle pattern signaling trend change.
- Meaning: Breakout confirmation.
29. Ladder Bottom
- Appearance: Series of lower lows followed by a reversal.
- Meaning: Bullish turnaround.
30. Stick Sandwich
- Appearance: Two same-colored candles with opposite candle in middle.
- Meaning: Reversal signal.
31. Tasuki Gap
- Appearance: Gap followed by a candle in opposite direction.
- Meaning: Continuation pattern.
32. Thrusting Line
- Appearance: Green candle closes into red candle’s body.
- Meaning: Weak bullish attempt.
33. Concealing Baby Swallow
- Appearance: Four-candle pattern signaling trend exhaustion.
- Meaning: Rare but high-probability reversal.
34. Three Inside Up/Down
- Appearance: Three-candle reversal setup.
- Meaning: Reliable trend change signal.
35. Upside/Downside Gap Three Methods
- Appearance: Gap followed by three small candles.
- Meaning: Continuation after a pause.
How to Trade Candlestick Patterns Like a Pro
1. Confirm with Volume & Trends
- Bullish patterns work best in uptrends.
- Bearish patterns work best in downtrends.
2. Use Multiple Timeframes
- Check daily charts for major signals.
- Use 1H/4H for precise entries.
3. Combine with Indicators
- RSI, MACD, Moving Averages add confirmation.
4. Avoid False Signals
- Trade only after candle closes.
- Ignore patterns in choppy markets.
Common Candlestick Trading Mistakes
❌ Trading single candles without context.
❌ Ignoring trend direction.
❌ Overlooking confirmation signals.
❌ Using too many patterns at once.
FAQs (People Also Ask)
1. Which candlestick pattern is most reliable?
✅ Engulfing, Doji, Hammer/Shooting Star are among the best.
2. Do candlestick patterns work in crypto?
Yes! Bitcoin & altcoins follow the same psychology.
3. How many candlestick patterns should I memorize?
Focus on 5-10 high-probability patterns first.
4. Can I automate candlestick pattern trading?
Yes, with MetaTrader scripts or TradingView alerts.
5. What’s the best timeframe for candlestick patterns?
Daily & 4H charts for swing trading, 1H/15M for day trading.