Candlestick patterns explained: 6 you'll actually see

Candlestick charts look intimidating and are actually one of the simplest tools in trading: every candle answers four questions about one time period — where price opened, where it closed, how high it went, and how low it went. That's it. Everything else is pattern-reading built on those four numbers.

Anatomy of a candle

The thick part (the body) spans open to close. The thin lines above and below (the wicks) mark the high and low. A green candle closed above its open; a red one closed below it. On a 1-hour chart each candle is one hour of trading; on a daily chart, one day. Same anatomy at every timeframe.

The insight that makes patterns meaningful: a candle is a record of who won that period — buyers, sellers, or neither. A long green body with tiny wicks says buyers were in control the whole time. A long upper wick says buyers pushed price up and got overwhelmed. Read candles as battles, not shapes, and the patterns below explain themselves.

The six patterns worth knowing first

1. Doji — open and close nearly equal; the body is a thin line. Neither side won: indecision. Alone it means little; after a long trend it hints the trend is tiring.
2. Hammer — small body at the top, long lower wick (2×+ the body), appearing after a decline. Sellers pushed price down hard; buyers absorbed it all and closed near the top. A potential reversal signal at support, noise in the middle of nowhere.
3. Shooting star — the hammer's mirror: small body at the bottom, long upper wick, after a rally. Buyers tried to continue up and were rejected.
4. Bullish engulfing — a green body that completely covers the prior red body. Sentiment flipped inside one period: sellers finished, buyers took over with force.
5. Bearish engulfing — the opposite: a red body swallowing the prior green one, often marking the end of a bounce.
6. Long-wick rejection at a level — not a textbook name but the one you'll use most: any candle whose wick pierces an obvious support/resistance level and closes back on the other side. The market tested the level and rejected it.

The part most articles skip

No pattern works in isolation, and none of them "predict" anything — they describe what just happened, which is only useful in context. A hammer at a support level that's held three times is information. The same hammer floating mid-range is noise. Professional chart reading is mostly about location (where the pattern forms) and confirmation (what the next candle does), not about memorizing fifty exotic pattern names. The six above plus location and confirmation beat an encyclopedia of patterns applied blindly.

Educational content only. Patterns describe past price action and carry no guarantee about future moves — nothing here is financial advice, and all trading on TSBCrypto is simulated.