Candlestick patterns help traders quickly understand who is in control of a stock during any time period. Each candle shows the open, high, low, and close. A green candle means buyers pushed the price up, while a red candle shows sellers pushed it down. The body shows where price stayed, and the wicks show where price only passed through.
When several candles form a pattern, they reveal momentum and possible turning points. Many have fun names but none of them are decisive signals. Bullish patterns like hammers and engulfing candles suggest buyers are stepping in. Bearish patterns like shooting stars and bearish engulfing candles hint that sellers are gaining strength. Some candles show indecision, such as doji and spinning tops.
Candlestick patterns are not perfect signals, but they give valuable insight into pressure, emotion, and trend direction. With practice, you can use them to confirm entries, improve timing, and understand market behavior more clearly.
The Candlestick Bible (168 pages)
