Candlestick Patterns Guide: The Ones Worth Knowing
Candlestick patterns describe what happened inside one or two bars. They are context about rejection and absorption, not signals in themselves.
Patterns only help when they are defined precisely enough to test. Every guide here gives you a measurable definition, an entry, an invalidation level, and the evidence on reliability.
No prior knowledge assumed. Start here.
Candlestick patterns describe what happened inside one or two bars. They are context about rejection and absorption, not signals in themselves.
A pattern is only useful if it can be defined precisely enough for a computer to find it. That single requirement eliminates most of what is taught.
Market structure reduces trend to a sequence of highs and lows. It is the most objective framework in price analysis and underlies most named patterns.
Levels matter because orders cluster there, not because prices remember. Understanding that changes how you identify and trade them.
Any two points define a line. That is the entire problem with trendlines, and the reason rules for drawing them matter more than the lines themselves.
Assumes you know order types, charts, and basic risk sizing.
The cup is a long base where supply is absorbed. The handle is the final shakeout before the breakout. Both parts need definition to be tradeable.
A double top is a level that rejected price twice. The pattern is easier to define than most, which makes it one of the more testable reversal structures.
Of all candlestick patterns, these two have the clearest mechanism and the most objective definitions, which is why they survive testing better than the rest.
A flag is a shallow pause after a sharp move. It works because the pause shows profit-taking being absorbed rather than a change of control.
The pattern is a failed higher high followed by a broken support level. That description is more useful than the shape, and easier to test.
Price action is not the absence of a method. It is a method built from structure, levels, and volatility rather than from derived indicators.
A gap is the market repricing while you could not trade. That makes gaps both an opportunity and the one risk a stop loss cannot protect you from.
A triangle is volatility compression with a directional bias built into its shape. Defining that compression numerically is what makes it tradeable.
A wedge is a converging range that slopes. The slope against the eventual break is what distinguishes it, and what makes it a weaker signal than it appears.
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