Candlestick Patterns Trading Guide

Candlestick trading guide

Put simply, candlesticks are a way of communicating information about how price is moving relative to time. Specifically, candles reveal four pieces of information for each time period: the open price for that time period, the close price, the high, and the low.

For instance, on a daily chart, each candle constitutes one day's worth of price activity. The low point on the candle is the lowest that price fell to during the day; the high point is the highest that price went to on that day. The open and close price are communicated by the location of the candle's body as well as what color the candle is.

The subject of candlestick analysis is more easily understood through visualization. See our guide on the subject for an in-depth look at candles and what they reveal about the balance between bulls and bears in the market at the time.

View Table of Contents
Risk Warning 3
What are Candlesticks? 4
Why Do Candlesticks Work? 6
Doji 7
Hammer 8
Hanging Man 9
Shooting Star 9
Checkmate 10
Evening Star 11
Morning Star 11
Bullish Engulfing 12
Bearish Engulfing  12
Harami/Inside Bar 13
Kicker 13
Piercing Line 14
Dark Cloud Cover 14
Three White Soldiers 15
Three Black Crows 15
Tweezer Pattern 16
Confluence  17
Reduce Your Learning Curve 19

Subscribe To Our Trading Guides Today!

Contact ThinkForex


Level 11, 636 St. Kilda Road.

Melbourne, VIC, Australia 3004

AFSL Number: 424700

ABN Number: 69 158 361561

AU: +61 3 9093 3400



TF Global Markets (UK) Limited.

2 Copthall Avenue, London, EC2R 7DA.

FCA Number: 629628

Registration Number: 09042646

UK: +44 203 514 2374

CN: +86 400 990 8300

Proud Supporter of:
Proud gold supporter of the Champion for Children Program - Unicef
Follow us