Trading Key Candlestick Patterns

Candlestick patterns are visual formations created by one or more candles that some traders use to gauge shifts in buying and selling pressure. They are widely referenced, though their reliability depends heavily on the context in which they appear.

A Few Commonly Referenced Patterns

• Engulfing pattern — a candle whose body fully covers the previous candle's body, sometimes read as a shift in short-term control between buyers and sellers
• Pin bar / hammer — a candle with a long wick and small body, sometimes interpreted as rejection of a price level
• Doji — a candle with a very small body, sometimes read as indecision between buyers and sellers