Candlestick Patterns: The Trader's Visual Language
By Forexiz Team
Candlestick charts originated in 18th-century Japan, invented by rice traders to track market sentiment. Today they're the universal language of technical analysis — and for good reason. A single candle communicates four data points: open, high, low, and close.
Anatomy of a Candlestick
The "body" of the candle represents the range between open and close. The "wicks" (or shadows) extend to the high and low. A green (bullish) candle closes higher than it opened. A red (bearish) candle closes lower.
- Long body = strong momentum in one direction.
- Long wick = rejection of a price level.
- Small body with long wicks = indecision.
- No wick on one side = strong conviction in that direction.
Single-Candle Patterns
Doji
Open and close are at nearly the same price. The result is a cross or plus shape. A Doji signals indecision — neither bulls nor bears won the session. After a strong trend, a Doji warns of a potential reversal.
Hammer & Hanging Man
A small body near the top of the range with a long lower wick. As a Hammer (at the bottom of a downtrend), it signals that sellers tried to push price lower but buyers rejected it — a bullish signal. The same pattern at the top of an uptrend is called a Hanging Man — a bearish warning.
Shooting Star & Inverted Hammer
A small body near the bottom of the range with a long upper wick. At the top of an uptrend, this is a Shooting Star — buyers pushed price up but sellers slammed it back down. Bearish reversal signal.
Marubozu
A full-body candle with no wicks. Strong conviction: a bullish Marubozu opened at the low and closed at the high, meaning buyers dominated the entire session. Very strong continuation signal.
Two-Candle Patterns
Engulfing Pattern
The second candle's body completely engulfs the first candle's body. A Bullish Engulfing (green candle engulfs a red one in a downtrend) is one of the most reliable reversal signals in any time frame. A Bearish Engulfing does the opposite.
Tweezer Tops & Bottoms
Two candles with nearly identical highs (Tweezer Top, bearish) or identical lows (Tweezer Bottom, bullish). The matching highs/lows show that price tested a level twice and was rejected both times — a strong sign of support or resistance.
Three-Candle Patterns
Morning Star & Evening Star
Morning Star: large bearish candle → small candle (gap or indecision) → large bullish candle. Signals a bottom reversal. Evening Star is the inverse — signals a top reversal. The middle candle is the key: it shows momentum stalling before the reversal.
Three White Soldiers & Three Black Crows
Three consecutive strong bullish candles (White Soldiers) after a downtrend signal a powerful trend reversal upward. Three Black Crows signal the opposite. These are strong patterns but require confirmation from volume or other indicators.
How to Use Candlestick Patterns on Forexiz
Forexiz includes live charts for every instrument. Switch between 1m, 5m, 15m, 1H, 4H, and D1 time frames. Higher time frames (4H, Daily) produce more reliable candlestick signals because there's more data behind each candle.
Candlestick patterns are most reliable when they form at a key support or resistance level. A Hammer in the middle of nowhere is far less meaningful than a Hammer at a major support zone.
Combining Patterns with Context
- Look for patterns at support/resistance levels — not in isolation.
- Confirm with at least one indicator (RSI divergence, moving average crossover).
- Use the pattern to time your entry, not to decide your direction — the trend determines direction.
- Set your Stop Loss just beyond the pattern's wick — that's your invalidation point.
Practice identifying these patterns in demo mode on Forexiz before trading them with real money. Scroll back through historical charts and spot the patterns you've learned — you'll start seeing them everywhere.