Candlestick patterns compress one idea: who was in control during the bar, and did they keep it. Here are the twelve worth knowing — with the honest framing most references leave out.
When we scanned classic single-indicator and single-pattern signals across six years of crypto data, almost none cleared trading fees on their own. Patterns are a language for reading pressure, not a trading system: the same shapes carry real information at a meaningful level in a clear regime, and pure noise in the middle of chop. Use them to frame a hypothesis — then grade the hypothesis before you fund it.
Open and close land almost on top of each other after a real fight in both directions.
How to read it: Indecision. After a strong trend it hints the pressure is fading — but a doji alone says “pause,” not “reverse.” It needs the next candle to mean anything.
A small body at the top with a long lower wick, appearing after a decline — sellers pushed price far down intraday and lost all of it back.
How to read it: The wick is the story: a rejected sell-off. More credible at a level buyers have defended before, and worthless without one.
Small body at the bottom, long upper wick, after a decline — an early attempt by buyers that got sold into, but sellers couldn't push a new low.
How to read it: Weaker than a hammer on its own; the pattern asks for bullish confirmation on the next candle before it counts.
The bearish mirror of the inverted hammer: after a rally, price spikes up hard and closes back near the open.
How to read it: A failed breakout attempt in one candle. Strongest at prior resistance or after an extended run.
Looks exactly like a hammer, but it prints after an advance instead of a decline.
How to read it: Sellers found real size for the first time in the trend. Same candle, opposite context — which is the whole lesson: context defines the pattern, not the shape.
A down candle followed by an up candle whose body completely swallows it.
How to read it: One of the few patterns with genuine intuition behind it: everyone who sold the previous candle is underwater by the close. Strength scales with volume and location.
An up candle followed by a down candle whose body completely swallows it.
How to read it: The mirror: late buyers are all trapped by the close. After a long uptrend at resistance it marks real distribution — in the middle of chop it marks nothing.
Three candles: a strong drop, a small indecision candle gapping lower, then a strong rally closing deep into the first candle's body.
How to read it: A full sentiment round-trip — panic, exhaustion, reversal — in three bars. One of the more reliable shapes, and one of the rarer ones.
The bearish mirror: strong rally, small stall candle at the top, then a strong decline closing deep into the first candle.
How to read it: Euphoria, hesitation, distribution. The third candle is the signal — the first two just set the stage.
Three consecutive full-bodied up candles, each opening inside the prior body and closing near its high.
How to read it: Sustained, orderly buying — trend confirmation rather than a reversal call. The risk: by the third soldier you're often late and buying someone's exit.
Three consecutive full-bodied down candles stepping lower.
How to read it: Sustained distribution. Same caveat in reverse — chasing the third crow into support is how shorts get squeezed.
Two candles printing (nearly) the same low — a down candle then an up candle rejecting the identical level.
How to read it: A price the market tested twice in a row and refused both times. The level matters more than the candles; mark it either way.
Think a pattern setup has an edge? Turn it into a rule and find out in a minute.
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