Complete Guide to Candlestick Analysis

Explore the history and guiding principles of candlesticks and how they frame analysis. Understand how psychology informs candlestick interpretation while noting what standard values cannot reveal.

Explore the history of candlestick analysis from 17th century Japan rice trading and its guiding principles: observe price action, ignore why, rely on price-reflected information, and capitalize on fluctuations.

Understand the candle concept, including its body and upper and lower shadows, and identify two candle types by open and close: open lower, close higher; or open higher, close lower.

See how a candlestick forms by mapping open, high, low, and close on a daily price path, and distinguish bullish and bearish candles by their body and open-close relationship.

Distinguish bull and bear candles by daily price action: a bull closes above the open; a bear closes lower, signaling market control.

Learn to read market psychology through candlestick charts, spotting greed, fear, panic, euphoria, and boredom to anticipate price movements and improve trading outcomes.

Compare candlestick and bar charts, highlighting open, high, low, and close, and show why candlesticks offer a clearer, more convenient way for most traders.

Candles disclose open, high, low, and close, show who won the battle via body length, and gauge volatility from the range to hint at future moves.

Uncover the limitations of candlesticks in signaling intraday movement; learn how open, high, low, and close data can form candles differently, and how lower timeframes reveal true price action.

Explore the origins in Japan and basics of candlestick analysis, including four data points open, high, low, and close, and how bulls and bears reveal market control and future direction.

Explore how to read candlesticks in module 2 by analyzing long and short candles, spinning patterns, and types like long-lived, dragonfly, gravestone, buju, and more, then assess candle strength.

Learn to read long and short candles. Long candles show longer bodies and ranges, signaling intense buying pressure and bullishness; short candles indicate consolidation and exhausted buyers and sellers.

Spinning tops are candles with small bodies and long shadows, signaling indecision as bulls and bears battle and hinting at a potential trend reversal.

Explore the doji candlestick pattern, where open and close are near equal with short shadows to signal indecision; learn to combine with other patterns for trading signals.

long-legged doji candles reveal indecision with long upper and lower shadows. dragonfly doji shows open and close at the same price, signaling buying pressure; gravestone doji signals bears taking control.

Marubozu signals buyers' full control, with no shadows and the high and close at the top from open to close, a powerful bullish candle rare in large caps.

Evaluate candle strength by comparing bullish candles, their shadows, and market control to distinguish very bullish, less bullish, and least bullish formations, guiding trading decisions.

Identify candlestick patterns by interpreting long candles for strong buying or selling, spinning tops for indecision, dragonfly and gravestone signals, and candle length and volume for strength.

Discover bullish candlestick reversal patterns such as Hemer, bullish engulfing, bullish piercing, and Morningstar. Learn risk–reward analysis, continuation patterns, and filters with volume, support, resistance, and trend lines.

Learn how bullish reversal patterns reverse a downtrend into an uptrend, including bullish engulfing and morning star, to catch the bottom and ride the next big market move.

The hammer is a single candle candlestick pattern with a small body and a long lower shadow, occurring in a downtrend to signal bullish reversal.

Learn a hammer trading filter in candlestick analysis: trade only when the hammer forms in a downtrend and the next candle is green, boosting probability to about 70–75 percent.

Learn to determine risk and reward using hammer candlestick patterns by setting stop losses with the ETR indicator, targeting the next resistance, and maintaining at least 1:1 risk-reward.

Identify the bullish engulfing pattern, a two-candle reversal where the bullish candle engulfs the bearish one, signaling a reversal in downtrends. Use filters requiring the next candle to open bullish.

Analyze risk-reward for bullish engulfing trades using stop loss below the prior low, target at next resistance, and entry at market open, with average true range risk assessment.

Explain bullish piercing, a milder bullish reversal in downtrends where a bearish candle closes above the halfway point, weaker than bullish engulfing, with risk reward considerations and ONGC examples.

Identify the morning star, a three-candle bullish reversal from a downtrend, where a bearish candle, a dodgy, and a bullish candle close above the first candle's high.

Identify bullish continuation patterns that extend an uptrend, notably the rising three, a five-candle setup starting with a bullish candle and ending with a close above the first high.

Identify high probability bullish candlestick setups by applying four filters: risk-reward, volume, support and resistance, and trend lines to boost win rates and find signals near support and trend lines.

Trade bullish candlestick reversals in a downtrend using hammer, bullish engulfing, piercing, or morning star. Enter on next bullish day with 1:1 risk-reward, near support or good volume after practice.

Explore bearish candlestick patterns and reversal patterns, including inverted hammer, bearish engulfing, bearish piercing, and evening star, plus high-probability setups, a continuation pattern, and a blueprint to create them.

Identify bearish reversal patterns that reverse the uptrend, including variation engulfing, inverted hanmer, and evening star, and learn how to treat them as downturn signals.

Identify the inverted hammer candle: a small body in the bottom quarter with a long upper shadow. Recognize a potential trend reversal in an uptrend from this single candle.

Identify bearish engulfing patterns in an uptrend; a second candle opens higher and closes below the previous low, signaling reversal and a potential short entry.

Explain bearish piercing in candlestick analysis, a two-candle pattern in an uptrend where a bullish candle is followed by a bearish candle that closes below halfway, signaling weaker buyers.

Identify the evening star pattern, a three-candle bearish reversal in an uptrend, with the final candle closing below the first candle’s low, signaling exhausted buyers; apply filters and risk management.

Falling three is a continuation pattern in a downtrend, with a long candle, inside candles, and a final candle closing below the low, signaling a short on the next open.

Apply filters such as volume, trend line, risk-reward, and support and resistance to improve high-probability trades in bearish candlestick patterns.

Master the blueprint to trade bearish patterns in an uptrending market, emphasizing reversal confirmations, 1:1 risk-reward, and bearish opens near resistance with trend-line confluence.

Explore bullish and bearish candlestick reversal patterns, learn how to apply risk-reward, volume, support, resistance, and trend line filters to identify high-probability trades.

Explore indecision candlestick patterns like spinning tops, dragonfly doji, gravestone doji, and four point doji, showing equal buying and selling pressure and no clear winner.

Learn to trade indecision candles by waiting for the next candle to confirm a trend reversal and applying filters like risk reward, volume, support, resistance, and trend line.

Master the five rules for candlestick trading: never trade in isolation, use filters, back test with a paper trail, refer to the cheat sheet, and always use a stop loss.

Understand how candlestick analysis sits within technical analysis and what next steps are not covered, such as indicators, oscillators, paper trading, and back testing.