Glossary · reference sheet · Trading & Charts
Candlestick Patterns
The shapes that matter, what they claim, and the context that makes them credible.
Reversal shapes
- HammerSmall body at top, long lower wick after a decline — buyers absorbed the lows.→ Needs support + volume + next-day confirmation.
- Shooting starSmall body at bottom, long upper wick after a rise — upside rejected.→ Strongest at resistance.
- Bullish engulfingGreen body fully covers prior red body.→ The stronger the engulf, the louder the claim.
- Bearish engulfingRed body fully covers prior green body at highs.→ Watch volume.
- Morning / evening star3-bar bottoming/topping: strong candle → small indecision → opposite strong candle.
Continuation shapes
- Three white soldiersThree strong rising green candles — trend resumption.
- Rising three methodsBig candle, three small inside pullbacks, breakout candle.
- MarubozuNo wicks — open at extreme, close at extreme. Pure conviction.
Context rules
- LocationPatterns matter at levels (support/resistance, MAs, gap edges), not mid-range.→ Ask "where is this happening?" first.
- VolumeExpanding volume supports the claim; thin volume weakens it.
- Base ratesMost patterns work 55–65% of the time — confirmation tools, not prophecies.
Rules of thumb on this sheet
- HammerNeeds support + volume + next-day confirmation.
- Shooting starStrongest at resistance.
- Bullish engulfingThe stronger the engulf, the louder the claim.
- Bearish engulfingWatch volume.
- LocationAsk "where is this happening?" first.
How to use this sheet
Read a row as a claim, not a fact: the term, what it means, and the condition that makes it matter. Each term has its own page, and the lessons it belongs to are linked from there.
Learn content is for education only — not individualized financial advice, a recommendation, or a solicitation to buy or sell any security. Options involve substantial risk. Examples are simplified and historical patterns never guarantee future results.