checkthestock

What are candlestick patterns?

A candlestick shows four prices for one period — open, high, low, close — in a single shape. The body shows where the session opened and closed; the wicks show how far price travelled beyond that. Green (or white) means it closed higher than it opened; red means lower.

Reading a single candle

The honest take on named patterns

Hammers, engulfing patterns, morning stars — the vocabulary is enormous, and most of it tests poorly as standalone signals. What consistently matters is where a pattern appears and who showed up:

A "hammer" in the middle of nowhere is a shape. The same hammer at a major support level, on twice normal volume, is a genuine piece of evidence: sellers tried to break the level and were absorbed. Pattern + location + volume — the three together are the signal.

How to use them without fooling yourself

Treat candles as the market's body language, not its promises. They describe the last session's psychology precisely — hesitation, rejection, conviction — but they predict little by themselves. Let the trend and levels decide the plan; let candles fine-tune the timing.

▶ Check any stock free →

Educational only — not financial advice. This guide explains general concepts for learning purposes and is not a recommendation to buy or sell any security. Always do your own research and consult a licensed financial adviser before investing.

← All guides  ·  Check a stock →