21 best Candlestick patterns in 2023

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Candlestick patterns are the most used form of technical analysis by traders and investors to analyze stock prices and future stock predictions. The candle stick patterns originated in Japan in the 18th century and were used to analyze rice trading. Today, they are widely used in various financial markets, including stocks, forex, commodities, and cryptocurrencies.

Candlestick charts display price information for a given time period, represented as a single “candle.” Each candle has a body and wicks, which show the price range for that period. The body represents the difference between the opening and closing prices, while the wicks (also known as shadows) represent the highest and lowest prices reached during the time period. The candlestick patterns

Free candle stick pattern pdf download

What are candle sticks?

Candlesticks are used to identify the market price fluctuations or movement of a share. These candle sticks were introduced by Japanese rice traders long back ago. There are two color candles used in the stock market.

  1. Green candle stick – The green candle resembles the price rise of a share. It is a bullish candle stick pattern.
  2. Red candle stick – The red candle stick is used to represent the price drop of a share.

Here is the list of the 21 best candlestick patterns in 2023

1) Doji candle stick

Doji is a specific type of candle where the body is too short and the wicks are larger.

Pattern – The Doji candle stick has a very thin body and long wicks.

Outcome – The Doji candle comes when there is a state of indecision or a balance between buyers and sellers during a specific trading period.

2) Hammer

hammer candle stick pattern

3) Hanging Man

The hanging man is a candle stick that at the end of a bullish pattern thereafter reflects a bearish pattern.

Candlestick patterns in 2023

Pattern – The hanging man doesn’t have a top wick whereas it has a downward wick.

Outcome – After the formation of Hanging Man, the trend moves to a bearish pattern.

4) Engulfing Pattern (Bullish and Bearish)

Engulfing pattern is two combinational candle stick pattern that signals a bullish move. In the engulfing pattern, a red candle is formed and a large green candle will be formed.

Engulfing Pattern

Pattern – A red candle that has a large body and smaller wicks. The adjacent green candle has a bigger body and smaller wicks.

Outcome – There are two variations in the engulfing patterns.

  1. Bullish engulfing – In the bullish engulfing, the move will be bullish
  2. Bearish engulfing – In the bearish engulfing, the move will be bearish.

5) Morning Star

The morning star is a 3-day candle stick pattern that signals a bullish move. This morning star has a very thin body and a log wick that resembles a bullish move.

Evening Star

Pattern – This is a three-day formation pattern

  1. Day 1 – On day 1, the candle stick closes in red.
  2. Day 2 – On day 2, the candle stick will be green with a small candle body and larger wicks.
  3. Day 3 – On day 3, the candle stick will have a large candle body with no or minimal wicks on both sides.

The morning star candle stick is a trend reversal candle stick pattern

6) Evening Star

The evening star is quite opposite to the morning star. The evening star also follows the same path as the Morning star but the evening star signals a bearish trend.

Evening Star

7) Doji Star #Candlestick patterns

8) Shooting Star

Shooting Star has a very long wick on the upper part of the candle and the body. The candle doesn’t have any downward wick. This pattern signifies a bearish trend.

Shooting Star

9) Inverted Hammer

The inverted hammer is quite the opposite of the shooting star. In this pattern, the candle has a long wick in the upward direction and a long candle body.

Inverted Hammer

10) Harami (Bullish and Bearish)

There are two types of harami patterns

Harami (Bullish and Bearish)
  1. Bullish Harami – In this type of pattern, a red candle stick is formed in the beginning and later a small green candle is formed. Both the candles have a large body and smaller wicks
  2. Berish Harami – In the bearish harami, the candle stick patterns are opposite to the bullish harami. In the beginning, a green candle stick is formed and later a red candle stick is formed.

11) Piercing Pattern

The piercing candle closes above 50% of the preceding candle stick. The candle opens below the preceding candle.

Piercing Pattern

This type of candlestick pattern is a bullish pattern.

12) Dark Cloud Cover

The dark cloud cover is exactly opposite to the piercing pattern. In this type, the red candle closes at more than 50% of the preceding candle stick. This resembles a bearish move pattern.

Dark Cloud Cover

13) Three White Soldiers

Three white soldiers is a pattern where three green stong body candle stick patterns are formed. These candle sticks are formed next to each other. This type of pattern resembles a strong bullish trend.

 Three White Soldiers

14) Three Black Crows

Three Black crows are exactly opposite to three white soldiers. This is a three-red candle stick pattern formed at the end of a bullish trend. This pattern is formed when bears take charge.

15) Three Inside Up

This is a three-candle stick pattern. The pattern is

Three Inside Up
  1. First candle – The first candle is a red candle that forms a large body and smaller wicks.
  2. The next candle stick will be a green candle that closes 50% above the green candle.
  3. The last candle will be again a green candle that closes above the first candle.

16) Three Inside Down

The Three inside down pattern is opposite to the three-inside-up pattern.

In this pattern,

Three Inside Down
  1. First candle – The first candle is a red candle that forms a large body and smaller wicks.
  2. The next candle stick will be a green candle that closes 50% above the green candle.
  3. The last candle will be again a green candle that closes above the first candle.

17) Bullish and Bearish Belt Hold

Bullish and Bearish Belt Hold is a two-candle stick pattern that has both bearish and bullish move

Bullish and Bearish Belt Hold
  1. Bullish Belt Hold – In this type, the first candle will be a red candle and the next candle will be a green candle.
  2. Bearish Belt Hold – This is again exactly opposite to the Bullish Belt Hold.

18) Tweezer Tops and Bottoms

Tweezer Tops and Bottoms are two long dual candle stick patterns where both of the candle sticks are very large in body and doest have any upper wicks.

Tweezer Tops and Bottoms
  1. Tweezer Tops – In the Tweezer tops, the day 1 candle stick is greenish and the day 2 candle stick is bearish.
  2. Tweezer bottoms – In the Tweezer bottoms, the day 1-day candle stick will be reddish and the day 2 candle stick will be greenish.

19) Marubozu (Bullish and Bearish)

Marubozu (Bullish and Bearish)

Marubozus are strong candle sticks that are formed in a bullish or bearish move. This pattern tells that us either bears are bulls are in charge to capture the market.

20) Rising Three Methods

Rising Three Methods is a three similar red candle sick pattern. In this pattern, three short red candle sticks are formed.

Rising Three Methods
  1. Candlestick 1 – In this candle stick, a red candle with an upward wick is formed.
  2. Candlestick 2 – In this pattern, a red candle with a downward wick is formed.
  3. Candlestick 3 – In the pattern, a red candle with again an upward wick is formed.

21) Falling Three Methods

 Falling Three Methods
  1. Candlestick 1 – In this candle stick, a red candle with an upward wick is formed.
  2. Candlestick 2 – In this pattern, a red candle with a downward wick is formed.
  3. Candlestick 3 – In the pattern, a red candle with again an upward wick is formed.

Wrapping up the candlestick patterns here

Conclusion

After a long read, we have come to an end. We hope you have liked the article and we assume this article can play a key role in your trading journey. These 21 candlestick patterns are very widely seen in the share movements. Understanding and executing them in your daily trading is an essential aspect.

thewallstreeteye

Varun is a stock market enthusiast and passionate writer. He has 2+ years of experience in writing about stock market and personal finance.