Candlestick Patterns Cheat Sheet: Complete Reference Guide
A candlestick patterns cheat sheet is a quick reference for identifying, interpreting, and trading the most common single, double, and triple candlestick formations used in technical analysis. Each pattern has specific rules for body size, shadow length, color, and position relative to the prior trend that determine what it signals.
How Pineify Helps
Pineify Coding Agent turns plain-language descriptions of candlestick patterns into Pine Script indicators that scan for those patterns in real time. You describe the pattern rules: body size, shadow length, color sequence, and position in trend. The agent generates the complete Pine Script code. The indicator runs on TradingView, scanning multiple timeframes simultaneously with alerts when a pattern appears. You can backtest the pattern strategy directly in TradingView to see win rates and average trade outcomes before risking real capital.
How to Identify Individual Candlestick Patterns on a Chart
Every candlestick has three structural elements: the body, the upper shadow, and the lower shadow. The body shows the distance between open and close. The shadows mark the high and low for that period. What matters for pattern identification is how these parts relate to each other and to the candles around them. A hammer has a small body at the upper end with a lower shadow at least twice the body length. A doji has a tiny body where open and close are nearly equal, signaling indecision. A bearish engulfing requires a red candle whose body fully covers the prior green candle body. The pattern name tells you the shape, but the trend position determines the signal.
- Body size relative to shadow length defines the pattern shape
- Hammer: small top body with lower shadow twice the body length
- Doji: open and close nearly equal, showing indecision
- Engulfing requires the second body to fully cover the first body
- A long real body with no shadow is a marubozu, showing strong conviction
What Each Candlestick Pattern Says About Price Direction
Bullish patterns tell you that buyers are overpowering sellers. Bearish patterns tell you the opposite. But every pattern must be read in the context of the prior trend. A doji after a long uptrend warns of potential exhaustion. The same doji in a sideways range means nothing. I check the prior trend direction before giving any meaning to a pattern. A bullish engulfing in a downtrend signals a reversal. The same pattern at the top of an uptrend can be a final blow-off move. Reversal patterns require a trend to reverse from, or they are just noise.
- Trend context determines pattern meaning, not the shape alone
- Doji after long trend equals potential exhaustion signal
- Engulfing in downtrend signals reversal, in uptrend signals possible blow-off
- Reversal patterns need an existing trend to reverse from
- Sideways ranges produce many false patterns that should be ignored
When to Enter a Trade After a Candlestick Pattern Forms
The pattern alone is never enough to enter a trade. I wait for confirmation from the next candle. For a bullish hammer on the daily chart, I wait for the next day to close above the hammer close. My stop goes below the hammer low. I look for a minimum 1:2 risk-reward ratio before entering. I spotted a bullish engulfing on SPY daily chart with RSI above 50 and volume above the 20-day average. The next day closed green with above-average volume. I entered at the open the following day with a stop at the engulfing low. The trade ran 4 percent over two weeks. Pattern reliability jumps when you combine the candle shape with volume, RSI, and a confirming follow-through candle.
- Wait for the next candle to confirm the direction before entering
- Place the stop loss below the pattern low for bullish setups
- Target a risk-reward ratio of at least 1:2
- Combine with volume above the 20-day average for higher conviction
- Check RSI for oversold or overbought alignment with the pattern direction
Common Mistakes Traders Make With Candlestick Patterns
The most common mistake is trading every pattern that appears. Most patterns fail in low-volume or choppy conditions. If the market is ranging with no clear direction, a doji or spinning top carries almost no predictive value. Another frequent error is ignoring the higher timeframe. A bearish engulfing on the 5-minute chart means little if the daily trend is strongly up. I lost three trades in a row on NVDA during a consolidation phase before I learned to filter out low-volume signals. Traders also mistake range bounces for reversals. A pattern that forms inside a trading range is a range oscillation, not a trend reversal.
- Do not trade every pattern in every market condition
- Patterns lose reliability in low volume and range-bound markets
- Check the daily timeframe before acting on a lower timeframe pattern
- A pattern in a range signals a bounce, not a trend reversal
- Low-volume days produce more false signals and should be filtered out
Most Common Candlestick Patterns Every Trader Should Know
Here is a quick reference of the most important candlestick patterns organized by category. Single candle patterns include doji (indecision), hammer (bullish reversal), hanging man (bearish reversal), shooting star (bearish reversal), and marubozu (strong conviction one-direction move). Double candle patterns include bullish engulfing (bullish reversal), bearish engulfing (bearish reversal), piercing pattern (bullish reversal), dark cloud cover (bearish reversal), and harami (potential slowdown). Triple candle patterns include morning star (bullish reversal), evening star (bearish reversal), three white soldiers (bullish continuation), and three black crows (bearish continuation). Continuation patterns like rising three methods show the trend pausing briefly before continuing, while reversal patterns need a clear existing trend to reverse from.
- Single candles: doji, hammer, hanging man, shooting star, marubozu
- Double candles: engulfing, piercing, dark cloud cover, harami
- Triple candles: morning star, evening star, three soldiers, three crows
- Continuation patterns: rising three methods, falling three methods
- All reversal patterns require an existing trend to be meaningful
This page is for informational purposes only and does not constitute investment advice. Trading stocks, forex, and crypto carries substantial risk of loss. Past performance does not guarantee future results. Always consult a qualified financial advisor before making trading decisions.