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Candlestick Patterns: Reading the Market's Language

Technical Analysis Basics · 8 min read

Basic Candlestick Structure

Each candlestick represents four prices: Open, High, Low, Close. The body shows the open-to-close range; wicks show the high and low extensions. A green/white candle means close > open (bullish); red/black means close < open (bearish).

Key Single Candlestick Patterns

Hammer

Appears at the bottom of downtrends. Long lower wick (at least 2× the body), little or no upper wick. Bears pushed price down but bulls fought back. ~60% win rate; wait for next-day confirmation.

Engulfing Pattern

Bullish engulfing: after a decline, a large green candle completely engulfs the previous red candle — strong reversal signal (~63% win rate). Bearish engulfing is the opposite.

Doji

Open and close nearly identical — tiny body. Represents market indecision. At trend tops or bottoms with high volume, carries significant reversal implication.

Key Multi-Candlestick Patterns

Morning Star

Three candles: large bearish → small body (gap down) → large bullish. Strong bottom reversal signal (~72% win rate) when confirmed with volume.

Evening Star

Opposite of Morning Star: large bullish → small body (gap up) → large bearish. Strong top reversal signal (~69% win rate).

⚠️ Candlestick patterns are probability tools, not certainties. Always confirm with MA position, volume, and other indicators. Avoid counter-trend trades in strong trends.

FAQ

Which timeframe works best for candlestick patterns?

Daily patterns are more reliable than hourly or minute charts. Weekly patterns have the most significance but appear less frequently.

What does a long wick mean?

Long upper wick = strong selling pressure above. Long lower wick = strong buying support below.

Where can I learn more candlestick patterns?

線上有位 covers 50 candlestick patterns with SVG illustrations and win rate statistics at our Pattern Analysis page.

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