Top 5 best candlestick patterns you should know

The analysis of the chart by the shape of the candles became one of the most popular, coming, like many other things, from trading in the stock market, and was isolated in a separate type of analysis – Candlestick Pattern. By itself, this option of presenting the graph is very convenient, at least for reasons of simplification and layout of graphical information. At the same time, there are patterns that can be identified and used to make a profit. The book, written by Steve Neeson, provides a list of the most popular models, and there is also a count and statistics for each model, which allows you to verify their performance. Consider the most popular models that are used in the forex market with examples of mining. You can read more about this in the article Hammer Candlestick – Guide on how to use it.

 Three Line Strike

The appearance of the Triple Strike pattern tells us about a certain suspension of the market. It is this decrease in activity that can lead the trader into indecision. However, after a short respite, trade resumes with renewed vigor. Today’s pattern consists of four candles, and like many patterns, it is symmetrical. That is, it can be both upward and downward.

The color of the candles depends on the direction of the current trend. With a rising trend, the first three candles of the pattern will be white, and the last black. With a declining trend, the situation changes exactly the opposite. The bodies of the candles are long and approximately equal in size, and the shadows are quite short.

Evening star

A fairly reliable candlestick model that is very easy to highlight on many time frames. It is a combination of three candles – two with a large range of bodies and one with a small. Formed in the final stages of the bull market and implies trading in a bearish direction. The entrance can be made already at the formation of the third candle if it picks up.


Three black crows

The model is the reverse of three white soldiers. It is formed on the development of a bearish trend and also consists of three candles, which are subsequently closed down. A distinctive feature is the often occurring parabolic acceleration precisely after the formation of the third candle, and in general, the bearish model often shows an increase in the range from one candle to another. On the one hand, this is convenient, since the goal can be achieved very quickly (if a specific number of points was set as a take), on the other hand, excessive acceleration subsequently leads to a very dynamic turn, for example, by pin-bar.

Abandoned Baby

This model of Japanese candles is, in many ways, similar to models such as the morning and evening stars. Very often, they are even confused with each other. The name speaks for itself – it is a lonely candle (Doji), which is formed with a price gap in relation to the previous candle and the next.

The composition includes three candles. The signal is medium. However, until the model is fully formed, trading on it is not recommended. The middle candle must be a Doji.


Two Black Gapping Candles

The Two Black Gapping Candles pattern appears in a downtrend and predicts its continuation. As with any other pattern, this one also should be confirmed on the following candles. Its second line can become the first line of some bullish reversal pattern, for example, a Bullish Harami or a Homing Pigeon. For that reason to consider pattern as confirmed, the following candle should be black with the closing price below the previous candle’s closing. On markets where volume data is relevant, the trading volume should increase on the candle following the pattern.