Japanese candlestick patterns: a visual vocabulary

The art of reading candles

Japanese candlestick charting dates back to the 18th century and is traditionally attributed to Munehisa Homma, a rice merchant. Today, candlestick patterns remain one of the most widely used tools in technical analysis. Every forex trader should be fluent in the language of candlesticks.

Understanding candlestick anatomy

Each candlestick represents a specific time period (1 minute, 1 hour, 1 day, etc.) and displays four pieces of information: the open, high, low, and close. The thick part is the "body" — it shows the range between the open and close. The thin lines above and below are "wicks" or "shadows" — they show the high and low of the period.

A bullish candle (typically green or white) closes higher than it opens. A bearish candle (typically red or black) closes lower than it opens. The length of the body indicates the strength of buying or selling pressure, while the wicks reveal rejection of higher or lower prices.

Single candlestick patterns

Doji: A candle with virtually no body — the open and close are nearly identical. It signals indecision and potential reversal, especially after a strong trend. Variants include the dragonfly doji (long lower wick, read as a bullish sign) and gravestone doji (long upper wick, read as a bearish sign).

Hammer: A candle with a small body at the top and a long lower wick (at least twice the body length). Appearing at the bottom of a downtrend, the hammer signals that sellers pushed price down but buyers stepped in to close near the high. It is read as a bullish reversal signal.

Shooting Star: The inverse of a hammer — small body at the bottom with a long upper wick. At the top of an uptrend, it shows that buyers pushed higher but sellers overwhelmed them, closing near the low. It is read as a bearish reversal signal.

Marubozu: A long candle with no wicks — the open equals the low (bullish) or high (bearish), and the close equals the high or low. This represents pure, decisive momentum in one direction.

Double candlestick patterns

Bullish Engulfing: A small bearish candle followed by a larger bullish candle that completely engulfs (covers) the first candle's body. This pattern at the bottom of a downtrend is read as a bullish reversal signal. By convention, the larger the engulfing candle relative to the first, the more weight the pattern is given.

Bearish Engulfing: The opposite — a small bullish candle followed by a larger bearish candle that engulfs it. At the top of an uptrend, this is read as a bearish reversal signal.

Tweezer Tops and Bottoms: Two consecutive candles with matching highs (tweezer top) or matching lows (tweezer bottom). They indicate that price has tested a level twice and been rejected, suggesting reversal.

Triple candlestick patterns

Morning Star: A three-candle bullish reversal pattern. First, a long bearish candle continues the downtrend. Second, a small-bodied candle (spinning top or doji) gaps lower, showing the selling pressure is exhausting. Third, a long bullish candle closes well into the first candle's body, which the pattern’s users take as confirmation.

Evening Star: The bearish counterpart. A long bullish candle, followed by a small-bodied candle that gaps higher, followed by a long bearish candle closing into the first body.

Three White Soldiers: Three consecutive long bullish candles, each opening within the previous body and closing progressively higher. This pattern is read as strong bullish momentum, and is conventionally given most weight after a period of consolidation or decline.

Three Black Crows: Three consecutive long bearish candles, each opening within the previous body and closing progressively lower. This is read as strong bearish momentum.

Applying candlestick patterns in forex

Candlestick patterns are conventionally given more weight when they appear at key technical levels — support and resistance zones, Fibonacci retracements, moving averages, or trendlines. A hammer at random is far less significant than a hammer at the 61.8% Fibonacci retracement level that coincides with the 200 EMA.

Practitioners usually look for confirmation from volume (where available) and other indicators, and many prefer higher timeframes (4-hour and daily), where there is less noise. None of this makes a pattern a forecast: a candle records what buyers and sellers did in one period, and the evidence that the named patterns predict what happens next is weak and disputed.

Revised 4 October 2026. Patterns described as “reliable” or as signals that “confirm” a reversal are now described as what their users read them to mean, and the article says that the evidence that candlestick patterns predict prices is weak and disputed.