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Candlestick Cheat Sheet — What Every Trader Should Know
Published by The Retail Trader · AUG 03, 2026 · Features
Candlestick charts are part of every trader's daily life. But do you know all the important patterns? This cheat sheet gives you every important candlestick pattern in one place.
One candle = 4 prices:
• Open: The candle's starting price
• High: The highest price of the period
• Low: The lowest price of the period
• Close: The candle's ending price
Green/White candle = Close > Open (bullish) Red/Black candle = Close < Open (bearish)
Upper shadow (wick): High - max(Open, Close) Lower shadow (tail): min(Open, Close) - Low
1. Doji:
• How it looks: Open and Close are almost the same — the body is very small or like a line
• Meaning: Indecision — balance between buyers and sellers
• Action: Read it in the context of the trend. A doji after an uptrend = reversal possible. A doji after a downtrend = bottom possible.
• Types:
• Standard Doji: Body almost invisible
• Long-legged Doji (Rickshaw man): Long shadows on both sides — high volatility, indecision
• Dragonfly Doji: Long lower shadow, no upper shadow — bullish reversal signal (in a downtrend)
• Gravestone Doji: Long upper shadow, no lower shadow — bearish reversal signal (in an uptrend)
2. Hammer:
• How it looks: Small body (at the top), long lower shadow (more than 2x the body), no/very small upper shadow
• Meaning: Sellers pushed the price down but buyers pulled it back — bullish rejection
• Action: If it appears at the end of a downtrend, it is a bullish reversal signal. For confirmation, the next candle should be green.
• Color: Green or red are both valid, but green is stronger
3. Hanging Man:
• How it looks: Just like a hammer — small body, long lower shadow, no upper shadow
• Meaning: Same as a hammer BUT if it appears at the top of an uptrend, it is a bearish reversal
• Action: If this appears after an uptrend, be cautious. If the next candle is red, sell.
• Color: Red is more bearish
4. Shooting Star:
• How it looks: Small body (at the bottom), long upper shadow (more than 2x the body), no/very small lower shadow
• Meaning: Buyers pushed the price up but sellers sold it back down — bearish rejection
• Action: If it appears at the top of an uptrend, it is a bearish reversal signal. Confirmed if the next candle is red.
• Color: Red is stronger
5. Inverted Hammer:
• How it looks: Like a Shooting Star — small body (at the bottom), long upper shadow
• Meaning: If it appears at the bottom of a downtrend, it is a bullish reversal signal
• Action: For confirmation, the next candle should be green. A gap-up green candle = strong buy signal.
6. Spinning Top:
• How it looks: Small body, long shadows on both sides
• Meaning: Indecision — volatility is high but direction is not clear
• Action: Read it in the context of the trend. A spinning top after a breakout/breakdown = pause; the trend may continue or reverse.
7. Marubozu:
• How it looks: No shadows (or very small ones) — just the body
• Green Marubozu: Open = Low, Close = High — the most bullish candle
• Red Marubozu: Open = High, Close = Low — the most bearish candle
• Meaning: Full control — buyers dominate in green, sellers dominate in red
• Action: A strong move in the trend direction. Green marubozu at support = buy. Red marubozu at resistance = sell.
8. Bullish Engulfing:
• How it looks: First a red candle, then a green candle — the green body completely covers the previous red body
• Meaning: Buyers have overwhelmed sellers — strong bullish reversal
• Action: If it appears at the bottom of a downtrend, it is a strong buy signal. Confirmed if the next candle is green.
• Volume: An engulfing on high volume = stronger
9. Bearish Engulfing:
• How it looks: First a green candle, then a red candle — the red body completely covers the previous green body
• Meaning: Sellers have overwhelmed buyers — strong bearish reversal
• Action: If it appears at the top of an uptrend, it is a strong sell signal. Confirmed if the next candle is red.
10. Tweezer Top:
• How it looks: Two candles with highs at the same level, the first green and the second red
• Meaning: Rejection at resistance — buyers failed both times
• Action: At the top of an uptrend = bearish reversal signal. Stop loss = above the tweezer high.
11. Tweezer Bottom:
• How it looks: Two candles with lows at the same level, the first red and the second green
• Meaning: Rejection at support — sellers failed both times
• Action: At the bottom of a downtrend = bullish reversal signal. Stop loss = below the tweezer low.
12. Harami:
• Bullish Harami: First red (big), second green (small, inside the body of the first)
• Meaning: Sellers are weakening, buyers are entering — reversal signal
• Action: In a downtrend = bullish reversal. Confirmation: the next green candle.
• Bearish Harami: First green (big), second red (small, inside the body of the first)
• Meaning: Buyers are weak, sellers are entering — reversal signal
• Action: In an uptrend = bearish reversal. Confirmation: the next red candle.
13. Piercing Line:
• How it looks: First a red candle, then a green candle — the green candle opens below the previous red candle's low and closes above the midpoint of the red body
• Meaning: Sellers gapped down but buyers pushed back — bullish reversal
• Action: At the bottom of a downtrend = strong buy signal
14. Dark Cloud Cover:
• How it looks: First a green candle, then a red candle — the red candle opens above the previous green candle's high and closes below the midpoint of the green body
• Meaning: Buyers gapped up but sellers pushed down — bearish reversal
• Action: At the top of an uptrend = strong sell signal
15. Morning Star:
• How it looks: 3 candles — (1) Big red, (2) Small body (green or red) gapping down, (3) Big green candle that closes above the midpoint of the first red body
• Meaning: Sellers exhausted, indecision, buyers take control — bullish reversal
• Action: At the bottom of a downtrend = very strong buy signal. Increasing volume = stronger.
16. Evening Star:
• How it looks: 3 candles — (1) Big green, (2) Small body gapping up, (3) Big red candle that closes below the midpoint of the first green body
• Meaning: Buyers exhausted, indecision, sellers take control — bearish reversal
• Action: At the top of an uptrend = very strong sell signal. Increasing volume = stronger.
17. Three White Soldiers:
• How it looks: 3 consecutive green candles, each with a higher close, each with a higher high, small lower shadows
• Meaning: Strong sustained buying — bullish reversal/continuation
• Action: After a downtrend = strong reversal. At support = strong buy. All 3 candles with increasing volume = strongest.
18. Three Black Crows:
• How it looks: 3 consecutive red candles, each with a lower close, each with a lower low, small upper shadows
• Meaning: Strong sustained selling — bearish reversal/continuation
• Action: After an uptrend = strong reversal. At resistance = strong sell. All 3 candles with increasing volume = strongest.
19. Three Inside Up:
• How it looks: (1) Big red, (2) Small green (harami pattern), (3) A bigger green that closes above the first red's high
• Meaning: Harami confirmation + breakout — bullish reversal confirmed
• Action: Strong buy signal. Stop loss = the first red's low.
20. Three Inside Down:
• How it looks: (1) Big green, (2) Small red (harami pattern), (3) A bigger red that closes below the first green's low
• Meaning: Harami confirmation + breakdown — bearish reversal confirmed
• Action: Strong sell signal. Stop loss = the first green's high.
QUICK REFERENCE TABLE:
• Doji — Type: Single, Reversal?: Maybe, Strength: ⭐⭐, Best Context: Any
• Hammer — Type: Single, Reversal?: Bullish, Strength: ⭐⭐⭐, Best Context: Downtrend bottom
• Hanging Man — Type: Single, Reversal?: Bearish, Strength: ⭐⭐⭐, Best Context: Uptrend top
• Shooting Star — Type: Single, Reversal?: Bearish, Strength: ⭐⭐⭐, Best Context: Uptrend top
• Inverted Hammer — Type: Single, Reversal?: Bullish, Strength: ⭐⭐, Best Context: Downtrend bottom
• Marubozu Green — Type: Single, Reversal?: Continuation, Strength: ⭐⭐⭐⭐, Best Context: Any
• Marubozu Red — Type: Single, Reversal?: Continuation, Strength: ⭐⭐⭐⭐, Best Context: Any
• Bullish Engulfing — Type: Two, Reversal?: Bullish, Strength: ⭐⭐⭐⭐⭐, Best Context: Downtrend bottom
• Bearish Engulfing — Type: Two, Reversal?: Bearish, Strength: ⭐⭐⭐⭐⭐, Best Context: Uptrend top
• Tweezer Bottom — Type: Two, Reversal?: Bullish, Strength: ⭐⭐⭐, Best Context: Downtrend bottom
• Tweezer Top — Type: Two, Reversal?: Bearish, Strength: ⭐⭐⭐, Best Context: Uptrend top
• Bullish Harami — Type: Two, Reversal?: Bullish, Strength: ⭐⭐⭐, Best Context: Downtrend
• Bearish Harami — Type: Two, Reversal?: Bearish, Strength: ⭐⭐⭐, Best Context: Uptrend
• Piercing Line — Type: Two, Reversal?: Bullish, Strength: ⭐⭐⭐⭐, Best Context: Downtrend
• Dark Cloud Cover — Type: Two, Reversal?: Bearish, Strength: ⭐⭐⭐⭐, Best Context: Uptrend
• Morning Star — Type: Three, Reversal?: Bullish, Strength: ⭐⭐⭐⭐⭐, Best Context: Downtrend bottom
• Evening Star — Type: Three, Reversal?: Bearish, Strength: ⭐⭐⭐⭐⭐, Best Context: Uptrend top
• Three White Soldiers — Type: Three, Reversal?: Bullish, Strength: ⭐⭐⭐⭐, Best Context: Downtrend bottom
• Three Black Crows — Type: Three, Reversal?: Bearish, Strength: ⭐⭐⭐⭐, Best Context: Uptrend top
• Three Inside Up — Type: Three, Reversal?: Bullish, Strength: ⭐⭐⭐⭐, Best Context: Downtrend
• Three Inside Down — Type: Three, Reversal?: Bearish, Strength: ⭐⭐⭐⭐, Best Context: Uptrend
IMPORTANT RULES:
• Context is king: Never trade candlestick patterns in isolation. Look at the trend, support/resistance and volume.
• Confirmation: Wait 1-2 candles for confirmation. Enter on the breakout, not on the pattern.
• Volume matters: A pattern on high volume = strong. Low volume = weak signal.
• Timeframe: Patterns on higher timeframes (daily/weekly) = more reliable. 1-min/5-min = noise.
• Always use a stop loss: Place the stop loss below/above the pattern's low/high.
• Don't force patterns: Not every candle is a pattern. Trade only clear, obvious patterns.
Learning Candlesticks on the TRT Platform:
• Superchart: Identify candlestick patterns on live charts
• 100+ Indicators: Combine candlesticks with indicators
• Drawing Tools: Mark support/resistance
• Education Hub: Content from candlestick basics to advanced
• Stock Screener: Filter stocks showing specific candlestick patterns
Q: How reliable are candlestick patterns? A: 60-70% on their own. 80%+ with an indicator + support/resistance. Context improves reliability.
Q: What is the best timeframe for candlestick trading? A: Daily and weekly are the most reliable. 15-min for intraday. Avoid 1-min (noise).
Q: Should I trade every candlestick pattern? A: No. Only clear, obvious, context-supported patterns. Skip ambiguous patterns.
Q: How do I use a candlestick + RSI combo? A: Bullish candlestick + RSI oversold = strong buy. Bearish candlestick + RSI overbought = strong sell. Confluence = confirmation.
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