The Most Popular Candlestick Patterns

List of the most well-known Japanese candlestick patterns used by traders from a variety of financial markets, including Forex, stocks, commodities, and others. These patterns are grouped according to their reliability.

The principles of technical analysis can be traced to the mid-17th century when Japanese farmers used charts to track the price of rice. Later, in the mid-18th century, these farmers began the use of candlestick charts, specifically shortly after 1850. The development of this important tool of analysis of prices is credited to Munehisa Homma, a rice trader from Sakata.

Currently, the candlestick chart is one of the most widely used tools for market analysis worldwide thanks to its easy interpretation and the large amount of information that it presents which can be used to study any financial market including the Forex. It also facilitates the interpretation of more or less reliable chart patterns which are used by many traders as trading signals to open and close positions.

The candlestick patterns can provide the trader with invaluable information on the price action with a simple glance. While common candlestick formations can provide important data about what is “thinking” the market, they can sometimes generate false signals precisely because they are frequent. Therefore, it is also important to know the more advanced patterns which have a high degree of reliability and their use in combination with other market analysis tools. As with any other resource of technical analysis, the candlestick patterns should be used with other analysis tools to confirm their signals.

There are at least 12 basic Japanese candlestick patterns that the trader must memorize at first, but experienced graphics analysts are able to identify many more. In fact, there are approximately 40 continuation and reversal patterns that generate signals whose reliability is variable, which means that there are formations more reliable than others. In general, their signals offer a good opportunity to predict movements of continuation or change with respect to the prevailing price trend. Also, these formations tend to occur with sufficient regularity to provide good opportunities for traders that can recognize and interpret them, especially in the context that the market has at that time.

By using the signals from the most reliable candlestick patterns, the trader can profit from various situations presented by the market, including periods in which other indicators show no clear signals as in many cases these indicators are lagging behind the price action. This is because the Japanese candlestick charts show the current price behavior and respond to this instantly, which can provide a clearer picture of what the market is doing. For this reason, there are traders who base their trading strategy completely on the candlestick formations.

As mentioned before,  some patterns are more reliable than others, but this does not mean that we should only use formations with greater reliability and entirely disregard the others. The signals produced by less reliable patterns can also generate good profits if they are used carefully and always in conjunction with other tools for confirmation. In general, some patterns including the most profitable occur sporadically so it is good to have an arsenal of candlestick patterns that we can identify at any time to analyze a price chart so as not to lose any good trading opportunity.

In order to learn to identify the most important candlestick patterns, we include a complete list of these formations grouped according to their degree of reliability and the type of trend in which are used. This list includes a link to a review that explains in detail the main features of each formation, how to identify it, and how to trade with it. This list will be increasing over time.

List of Japanese Candlestick Patterns

Bullish Trend Candlestick Patterns

High Reliability Patterns

  • Big White Candle
  • Long Lower Shadow.
  • Dragonfly Doji.
  • Piercing Line
  • Engulfing Bullish
  • Three Outside Up.
  • Three Inside Up Bullish.
  • Kicking Bullish
  • Rising Window
  • Side by Side White Line Bullish.
  • Morning Star.
  • Morning Doji Star.
  • Abandoned Baby Bullish
  • Three White Soldiers.
  • Rising Thres Methods.
  • Mat Hold
  • High Price Gapping Bearish.
  • Concealing Baby Swallow.

Medium Reliability Patterns

  • Bullish Harami Cross
  • Homing Pigeon
  • Matching Lows
  • Tweezers Buttons.
  • Upside Tasuki Gap.
  • Upside Gap Three Methods.
  • Bullish Doji Star.
  • Tri Star Bullish.
  • Stick Sandwich Bullish.
  • Three Star in the South.
  • Unique Three River Bottom.
  • Breakaway Bullish.
  • Ladder Buttom.

Low Reliability Patterns

  • Hammer.
  • Inverted Hammer.
  • Long White Candlestick.
  • White Candlestick Marubozu.
  • White Closing Marubozu.
  • White Opening Marubozu.
  • Belt Hold Bullish.
  • Meeting Lines Bullish.
  • Bullish Harami.
  • Separating Lines Bullish.
  • Three Line Strike Bullish.

Bearish Trend Candlestick Patterns

High Reliability Patterns

  • Big Black Candle.
  • Long Upper Shadow.
  • Dark Cloud Cover.
  • Engulfing Bearish.
  • Three Upside Down.
  • Three Inside Down.
  • Kicking Bearish.
  • Falling Window.
  • Side By Side White Lines Bearish.
  • Evening Star.
  • Evening Doji Star.
  • Falling Three Methods Bearish.
  • Abandoned Baby Bearish.
  • Three Black Crows.
  • Low Price Gapping Bearish.
  • Upside Gap Two Crows.

Medium Reliability Patterns

  • Bearish Harami Cross.
  • On Line Neck.
  • In Neck Line.
  • Twezeers Top.
  • Downside Tozuki Gap.
  • Downside Gap Three Methods.
  • Tri-Star Bearish.
  • Avance Block.
  • Doji Star Bearish.
  • Three Mountains Top.
  • Deliberation Bearish
  • Breakaway Bearish.
  • Two Crows.

Low Reliability Patterns

  • Gravestone Doji.
  • Shooting Star.
  • Hanging Man.
  • Long Black Candlestick.
  • Black Candlestick Marubozu.
  • Black Closing Marubozu.
  • Black Opening Marubozu.
  • Belt Holt Bearish.
  • Meeting Lines Bearish.
  • Bearish Harami.
  • Separating Lines Bearish.
  • Three Line Strike Bearish.

Candlestick Patterns Independent of the Trend

Medium Reliability Patterns

Low Reliability Patterns

1 thought on “The Most Popular Candlestick Patterns”

  1. Drawing trend lines is one of the few easy techniques that really WORK. Prices respect a trend line, or break through it resulting in a massive move. Drawing good trend lines is the MOST REWARDING skill.

    The problem is, as you may have already experienced, too many false breakouts. You see trend lines everywhere, however not all trend lines should be considered. You have to distinguish between STRONG and WEAK trend lines.

    One good guideline is that a strong trend line should have AT LEAST THREE touching points. Trend lines with more than four touching points are MONSTER trend lines and you should be always prepared for the massive breakout!

    This sophisticated software automatically draws only the strongest trend lines and recognizes the most reliable chart patterns formed by trend lines…

    Chart patterns such as "Triangles, Flags and Wedges" are price formations that will provide you with consistent profits.

    Before the age of computing power, the professionals used to analyze every single chart to search for chart patterns. This kind of analysis was very time consuming, but it was worth it. Now it's time to use powerful dedicated computers that will do the job for you:

Leave a Comment