The candlestick cheat sheet. Eight patterns, all the rules.

This page is the single reference for every candlestick pattern worth knowing. Eight patterns. The conditions that make each one tradable. The context that turns a pattern from a shape into a setup. Bookmark this page and stop memorizing the fifty pattern lists that fill the internet.

The candle anatomy

A candle shows four prices over a time window. Open, high, low, close. The body is the distance from open to close. The wicks extend to the high and low.

Green or hollow body: close above open. Buyers won the window.

Red or filled body: close below open. Sellers won.

Long body: decisive win.

Long wicks: the other side fought back.

Body for who won. Wicks for who fought back. That is the whole framework.

The eight patterns worth knowing

1. Marubozu (bullish or bearish)

A candle with a long body and almost no wicks on either end. Buyers (or sellers) opened, drove price one direction the entire window, closed at or near the extreme.

Context: bullish marubozu at support after a downtrend signals reversal. Bearish marubozu at resistance after an uptrend signals reversal.

Confirmation: volume on the marubozu should be meaningfully above the recent average.

2. Doji

Open and close at almost the same price. Wicks above, below, or both. Indecision.

Context: doji at the top of an extended move signals possible reversal warning. Doji in the middle of nowhere means nothing.

Confirmation: the next candle decides. Without follow through, the doji is just a pause.

3. Hammer (bullish reversal)

Small body at the top of the candle, long lower wick at least twice the body length. Sellers tried to push down, buyers absorbed and pushed back up to close near the open.

Context: hammer at support at the bottom of a pullback in an uptrend is a reversal candle. Hammer with no nearby level is noise.

Confirmation: volume above average on the hammer. Next bar closes above the hammer high.

4. Shooting Star (bearish reversal)

Mirror image of the hammer. Small body at the bottom, long upper wick at least twice the body. Buyers tried to push higher, sellers absorbed and pushed back down.

Context: shooting star at resistance after a run up signals the run is done. Without the resistance level, the pattern is weak.

Confirmation: volume above average. Next bar closes below the shooting star low.

5. Bullish Engulfing

Current green candle body fully contains the prior red candle body. Buyers took back everything sellers earned in the prior window, and then some.

Context: bullish engulfing at clear support with above average volume on the engulfing bar is the cleanest reversal pattern in the eight.

Confirmation: volume on the engulfing candle should be above average. The engulfing should fully contain the prior body, not just the wicks.

6. Bearish Engulfing

Mirror image. Current red body fully contains prior green body. Sellers took back everything plus more.

Context: bearish engulfing at resistance after an extended run, with volume, is the reversal candle that ends most parabolic moves.

Confirmation: same as bullish engulfing. Volume and full body containment.

7. Morning Star (bullish reversal)

Three candle pattern. Long red, small body (sometimes a doji) gapping lower, long green closing well into the body of the first red.

Context: morning star at major support after extended decline signals end of selling phase. The small body in the middle is the pause where selling exhausted.

Confirmation: volume should rise across the three candles, peaking on the third green confirmation candle.

8. Evening Star (bearish reversal)

Mirror image. Long green, small body gapping higher, long red closing well into the green.

Context: evening star at major resistance after extended rally signals end of the buying phase.

Confirmation: volume across the three candles. Third red candle on highest volume.

The context that matters

Every pattern above is moderate signal in isolation. The same patterns at a key level with volume confirmation are strong signals. The same patterns in random parts of the chart are noise.

Level.

The pattern should form at a meaningful level. Support, resistance, moving average (200 EMA especially), Fibonacci retracement, prior swing pivot, round number.

Higher timeframe trend.

Bullish reversal patterns work best when the higher timeframe is also bullish (the reversal pattern marks the end of a pullback within a larger uptrend). Bearish reversals work best when the higher timeframe is bearish or transitioning.

Volume.

The pattern candle should print on above average volume. Volume confirms real participation versus noise.

Confirmation candle.

The next candle should follow through in the direction the pattern suggested. Reversal pattern without follow through often fails.

The order of reads for a clean setup

1. Trend on the higher timeframe. Bullish or bearish.

2. Level on the working timeframe. Pattern at a real level or not.

3. Pattern at the level. One of the eight from above.

4. Volume confirmation. Above average on the pattern candle.

5. Confirmation candle. Next bar follows through.

6. Entry on the break of the confirmation bar's extreme.

7. Stop beyond the wick of the original pattern candle.

The whole sequence is a minute to walk through. It filters out about 70 percent of the trades the new trader was going to take. The remaining trades carry the actual edge.

What this cheat sheet does not include

Three candle continuation patterns (rising three methods, falling three methods). Rarely useful for retail.

Tweezer tops and bottoms. Marginally useful. Mostly redundant with the eight above.

Harami patterns (small body inside larger body). Useful in some setups but adds complexity without much reliability improvement.

The 40 plus other named patterns from candlestick books. Almost all are either restatements of the eight above or rare patterns that produce few setups.

The eight patterns plus context are enough. Adding more patterns rarely adds more edge.

Where the audit fits

The audit reads the actual chart entries and shows whether the patterns were taken with context (level, volume, trend, confirmation) or in isolation. For most retail the pattern is taking patterns without context. The plan locks the sequence checklist as a hard gate. Five to seven pages.