Candlestick Patterns

Green Candle

Close > Open. Bullish bar — buyers won the day.

Buy AAPL when the day is a green candle and RSI is below 35

Red Candle

Close < Open. Bearish bar — sellers dominated.

Sell all TSLA when the day is a red candle and RSI is above 75

Doji

Open ≈ Close with long wicks. Indecision — neither buyers nor sellers in control. Often signals a reversal.

Buy SPY when a doji forms after 3 red candles and price is above the 200-day SMA

Hammer

Long lower shadow (2x+ body), small body at top. Bullish reversal signal — sellers pushed price down but buyers recovered.

Buy NVDA when a hammer forms and RSI(14) is below 30

Shooting Star

Long upper shadow, small body at bottom. Bearish reversal — buyers pushed up but sellers rejected it.

Sell all MSFT when a shooting star forms at a 52-week high

Bullish Engulfing

Green bar's body completely covers the previous red bar. Strong reversal signal — buyers overwhelmed sellers.

Buy AAPL when a bullish engulfing pattern forms and price is above the 200-day SMA

Bearish Engulfing

Red bar's body completely covers the previous green bar. Bearish reversal — sellers overwhelmed buyers.

Sell all QQQ when a bearish engulfing forms after 5 consecutive green candles

Long-Legged Doji

Doji with extremely long upper and lower shadows. Signals high indecision and potential reversal at extremes.

Buy AAPL when a long-legged doji forms at a 52-week low

Bullish Belt Hold

Long green candle that opens at its low — no lower shadow. Strong bullish conviction from the open.

Buy NVDA when a bullish belt hold forms after a 5% pullback

Bearish Belt Hold

Long red candle that opens at its high — no upper shadow. Strong bearish conviction from the open.

Sell all TSLA when a bearish belt hold forms at a new high

High Wave

Small body with very long shadows on both sides. Extreme uncertainty — market is searching for direction.

Avoid new positions when a high wave candle forms and ADX is below 20

3 Consecutive Red Candles

Three bars in a row closing lower than they opened. Sustained selling pressure — possible oversold.

Buy AAPL when 3 consecutive red candles form and RSI drops below 30

3 Consecutive Green Candles

Three bars in a row closing higher. Sustained buying pressure — momentum confirmation.

Buy NVDA when 3 green candles in a row and volume is 1.5x above average

Inside Bar

High/low contained within previous bar's range. Consolidation before a breakout — trade the direction of the break.

Buy MSFT when an inside bar forms followed by a breakout above the inside bar's high

Outside Bar

High AND low exceed previous bar. Volatility expansion — often signals trend continuation or reversal.

Buy SPY when an outside bar forms on 2x average volume

Higher Highs

Each bar makes a higher high than the previous. Classic uptrend confirmation.

Buy QQQ when 3 consecutive higher highs and price is above the 50-day SMA

Lower Lows

Each bar makes a lower low. Downtrend confirmation — stay out or go short.

Sell all positions when 3 consecutive lower lows and price is below the 200-day SMA

Bullish Kicking

Bearish marubozu followed by bullish marubozu with a gap up. One of the strongest bullish signals.

Buy SPY when a bullish kicking pattern forms

Bearish Kicking

Bullish marubozu followed by bearish marubozu with a gap down. One of the strongest bearish signals.

Sell all QQQ when a bearish kicking pattern forms

Bullish Counterattack

Red candle followed by green candle that closes at the same level. Sellers fail to follow through.

Buy AAPL when a bullish counterattack forms and RSI is below 40

Bearish Counterattack

Green candle followed by red candle that closes at the same level. Buyers fail to follow through.

Sell all MSFT when a bearish counterattack forms and RSI is above 65

On Neck

Red candle followed by small green candle that closes near the prior low. Bearish continuation.

Short TSLA when an on neck pattern forms in a downtrend

Thrusting

Red candle followed by green candle that closes into but not past the midpoint of the red body. Weak bullish attempt.

Buy MSFT when a thrusting pattern forms and the next candle closes above the thrusting candle's high

Separating Lines Bullish

Red candle followed by green candle opening at the same open. Trend continuation in an uptrend.

Buy AMZN when bullish separating lines form above the 50-day SMA

Separating Lines Bearish

Green candle followed by red candle opening at the same open. Trend continuation in a downtrend.

Sell all when bearish separating lines form below the 200-day SMA

Homing Pigeon

Two red candles where the second is contained within the first. Selling pressure fading.

Buy GOOG when a homing pigeon forms and volume is declining

Matching Low

Two red candles with the same closing price. Support level forming — potential reversal.

Buy META when a matching low forms at support

Three Inside Up

Red candle, inside green candle, then green close above first bar. Confirmed bullish reversal.

Buy AAPL when three inside up forms and RSI is below 40

Three Inside Down

Green candle, inside red candle, then red close below first bar. Confirmed bearish reversal.

Sell all NVDA when three inside down forms at a 52-week high

Three Outside Up

Red candle, bullish engulfing, then higher green close. Strong reversal with follow-through.

Buy MSFT when three outside up forms after a 10% decline

Three Outside Down

Green candle, bearish engulfing, then lower red close. Strong bearish reversal with confirmation.

Sell all when three outside down forms and MACD crosses bearish

Three Line Strike

Three same-direction candles followed by a large opposite candle that engulfs all three. 4-bar pattern.

Buy SPY when a bullish three line strike forms at support

Rising Three Methods

Long green, three small red candles within its range, then another long green. 5-bar bullish continuation.

Buy QQQ when rising three methods forms in an uptrend

Falling Three Methods

Long red, three small green candles within its range, then another long red. 5-bar bearish continuation.

Sell all when falling three methods forms below the 50-day SMA

Bullish Tri-Star

Three consecutive doji candles with the middle one gapping lower. Rare but powerful reversal signal.

Buy AAPL when a bullish tri-star forms after a prolonged downtrend

Bearish Tri-Star

Three consecutive doji candles with the middle one gapping higher. Rare bearish reversal at tops.

Sell all when a bearish tri-star forms after 6 months of gains