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The Complete Guide for Trading the Japanese Candlesticks Patterns and Signals… Make Sure to Download the eBook

Candlesticks are one of the most important tools we have in the technical analysis.

The information that the candlesticks give us, are the best and most accurate.

If you like to become a good and professional trader, it is strongly recommended to learn the candlesticks’ signals.

This is how we trade too.

We trade the too strong candlesticks patterns combined with Bollinger Bands breakouts.

To learn our trading system, first you have to learn the candlesticks signals and patterns.

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Please scroll down and read the below explanations completely.

However, make sure to download our candlestick eBook too.

Our eBook covers some very important topics in details:

  1. Candlestick Signals and Patterns
  2. High Wave Candlesticks and Their Reversing Power
  3. How to Trade the Continuation Chart Patterns with Candlesticks and Bollinger Bands
  4. Candlestick, Heikin Ashi and Renko Charts
  5. The Importance of the Confirmation Candlestick
  6. Analysis of Strong Piercing Line and Bullish Engulfing Candlestick Patterns
  7. Features of a Strong Bearish Engulfing Candlestick Pattern
  8. Dark Cloud Cover and Piercing Line Candlestick Pattern
  9. Features of a Strong Dark Cloud Cover Candlestick Pattern
  10. Hammer and Inverted Hammer Candlesticks
  11. Hanging Man Candlestick
  12. Bullish Engulfing and Bearish Engulfing Candlestick Patterns
  13. Abandoned Baby Candlestick Pattern
  14. Inside Day Candlestick as a Strong Reversal Pattern
  15. Harami and Harami Cross Candlestick Patterns
  16. Dragonfly Doji Candlestick: A Frequently Forming Doji
  17. Daily Candlesticks and Bollinger Middle Band
  18. What Do the Candlesticks Shadows Tell You?
  19. Candlestick Patterns and Signals that Make Money
  20. Gravestone Doji Candlestick: What Does It Mean Exactly?
  21. Doji Candlestick with Bollinger Bands Are Good Trading Tools

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History

Candlesticks are the oldest form of technical analysis in the world.

Japanese Candlesticks were invented by a Japanese rice trader, Munehisa Homma, in 17th century.

He spent about ten years of his life in researching and analyzing of the effect of weather, psychology of buyers and sellers, and many different conditions on the rice price.

Then he made 100 successful trades and retired a rich man and wrote two books about technical analysis.

Candlesticks are the indicators of the markets’ psychology.

This is the first and most important thing you have to know about the candlesticks.

Price volatility is the result of nothing but behavior of buyers (Bulls) and sellers (Bears).

When there is more tendency to buy, the price goes up and visa versa.

Candlesticks are the indicators that reflect the emotions (fear and greed) of buyers sellers.

Candlesticks have their own language which is very easy to learn.

If you learn their language, you will see that they really talk to you and tell you about the next price movements.

– Candlesticks As the Only Real Time Indicators

When you combine them with some other useful indicators like Bollinger Bands, they will become the best trading tools.

All other indicators like Stochastic, MACD and RSI are delayed and produce a lot of false signals, if you don’t know how to use them properly.

They are tricky and can cause you to lose a lot.

Ignoring the candlesticks and trading based on these indicators, is like driving with closed eyes and just by listening to the directions that someone else is giving you.

It is clear that he can not give you the directions “on time”.

Your reactions will not be on time too and you will be delayed which can be too dangerous.

Candlestick trading and the related technical analysis were introduced to the western countries in 1985 and became so popular.

Candlestick is basically a rectangle that gives 4 different parameters in a special time span (time frame).

In the daily time frame, one candlestick forms every 24 hours.

In the 5min time frame, one candlestick forms every 5 minutes, and so on.

Candlesticks Anatomy

Each candlestick represents 4 parameters:

  1. Open price
  2. Close price
  3. High price
  4. Low price

For example, in one hour time-frame, the open price is the price of the currency pair at the time that each candlestick opens.

In this time-frame, it takes one hour for each candlestick to mature.

So let’s say when a candlestick is just opened on an one hour chart, the price is 1.9825.

This is the open price.

The price goes up and down during one hour, and finally, when one hour is over, the price is 2.0080. This is the close price.

When the close price is higher than the open price, the candlestick is Bullish.

It means the price has gone up during the formation of the candlestick.

If the close price is lower than the open price, the formed candlestick is Bearish.

It means the price has moved down while the candlestick was forming.

High price is the maximum price and low price is the minimum price, during the formation of the candlesticks in that special time-frame.

The differences of the bullish and bearish Japanese candlesticks

The shape and color of a candlestick may change several times during its formation.

Therefore, you have to wait for the candlestick to be formed completely.

Then you read the candlestick signal and do your analysis and make a decision.

Candlesticks have two main parts:

  1.  Body
  2. Shadows

Candlestick body and shadows

Psychology of the Markets

Candlestick trading means knowing the psychology of the markets through the candlesticks shapes and colors.

Candlesticks are the indicators of the markets psychology.

They show us if there is more buying than selling or there is more fear than greed on the market and visa versa.

Using this information, you will be able to predict the next price direction.

It is the shape of the candlesticks that reflect the psychology of the markets.

Because of the price changes, candlesticks can have several different shapes.

For example the open and close prices can be the same.

Or the high price can be the same as the close price.

Let’s see how many different shapes candlesticks can have:

1. Typical Candlesticks:

In this case, all of the four prices are different from each other.

A typical candlestick can be Bullish or Bearish.

A typical bullish candlestick (left), and a typical bearish candlestick (right):

A bullish candlestick          A bearish candlestick

2. Marubozu:

Marubozu means shaven.

Candlesticks that have no shadows are called Marubozu.

A bullish Marubozu candlestick     A bearish Marubozu candlestick

What Does Marubozu Mean?

In Bullish Marubozu candlestick, the open price is the same as the low price, and the close price is the same as the high price.

Bullish Marubozu means that Bulls are so strong and didn’t allow Bears to take the price down while the candlestick was forming.

It means there is a lot of buying activities on the market and bulls have the full control.

The size of the candlestick, reflects the strength of the bulls or buyers.

The longer the Marubozu candlestick, the stronger the bulls or buyers.

In Bearish Marubozu candlestick, the open price is the same as the high price and the close price is the same as the low price.

A Bearish Marubozu means that Bears are strong and there is a lot of selling activities on the market, specially when the Bearish Marubozu is longer than the previous candlesticks.

What Does It Mean in General?

1. When you see a Bullish Marubozu, you should not take a short position because Bulls are strong and price can go higher.

2. When you see a Bearish Marubozu, you should not take a long position.

3. When you see a Bullish Marubozu at the bottom of a downtrend, it is a reversal signal and it is possible that the market turns around and goes up.

Or, it can be an exhaustion signal which means bears are exhausted and can’t take the price lower, and so, it is possible that the market moves sideways for a while before it continues the downtrend or turns around.

4. When you see a Bearish Marubozu at the top of an uptrend, it is a reversal signal and it is possible that the uptrend turns around and goes down.

Or, it can be an exhaustion signal which means bulls are exhausted and can’t take the price higher, and so, it is possible that the market moves sideways for a while before it continues the uptrend or turns around.

5. If you already have a long position and you see a Bearish Marubozu at the top of the uptrend, you should close your position and take your profit.

6. If you already have a short position and you see a Bullish Marubozu at the bottom of the downtrend, you should close your position and take your profit.

We will talk about the candlesticks patterns and you will learn more about taking the right decision when you see different kinds of candlesticks.

However, for now just keep in mind that Bullish/Bearish Marubozu means Bulls/Bears are strong and have taken the control.

3. Doji:

Doji means unskillfully formed.

These kinds of candlesticks are called Doji or unskillfully, because they don’t have a body.

Why?

When the open price and close price are the same, the candlestick will have no body and is called Doji candlestick.

Doji candlesticks have no color, and so they are neither Bullish nor Bearish.

What does it mean?

It means both Bulls and Bears have the same power and are matched and the price doesn’t know where to go.

It doesn’t know if it goes up or down, because Bulls are not able to increase the price and Bears are not able to decrease it.

So Doji candlesticks are indecision and uncertainty signals.

Of course, sometimes the open and close prices are not exactly the same, and so the Doji candlestick will have a small body.

However, when the body is too small, still the candlestick can be known as a Doji candlestick that should have no body typically.

All kinds of Doji candlesticks need confirmation.

I will tell you what confirmation means.

There are different types of Doji candlesticks.

The most important one is called Rickshaw Man.

In Rickshaw Man, the cross bar is roughly central.

Rickshaw Man Doji Candlestick

Rickshaw Man is a strong indecision signal.

So when you see it at the top of an uptrend, it means the price can go higher, or lower, or move sideways.

The longer the the shadows, the stronger the Doji signal.

Gravestone:

Another kind of Doji is called Gravestone:

Gravestone Doji Candlestick

This kind of Doji also means indecision.

When it forms at the top of an uptrend, it means the price wants to stop going up and maybe bounce down or move sideways for a while.

Dragonfly:

At the bottom of the market sometimes you see the Inverted Gravestone:

Inverted Gravestone Doji Candlestick

Inverted Gravestone is known as Dragonfly also.

Of course it doesn’t mean that inverted gravestone or gravestone cannot be seen at the top or bottom of the markets.

Anywhere they form, they signal indecision.

Doji can be seen in some other different shapes too:

Different shapes of Doji Different shapes of Doji

Sometimes Doji has a small body:

What Should You Do When You See a Doji?

As I said, Doji means indecision and uncertainty.

When it forms at the top of an uptrend or at the bottom of a downtrend, it means the price is uncertain to go up or down or sideways.

When you see a Doji, if you already have a position, you have to take your profit and if you don’t have any positions, you have to wait for the confirmation candlestick to choose a direction and enter a trade.

What do I mean by “confirmation candlestick”?

One of the very next a few or few candlesticks, can work as a confirmation.

For example, when you see a Gravestone at the top of an uptrend, you should get ready to go short, but first you have to wait for the next candlestick or even next two candlesticks sometimes.

If they are Bearish, it means bears (sellers) have taken the control and the price will go down.

You can go short after the confirmation candlestick close.

Please note that Doji candlesticks that have longer shadows, are stronger.

As you see, the Doji is confirmed by the next candlestick and the price went down:

Doji and then the confirmation candlestick

the conformation candlesticks

4. Hammer and Hanging Man:

Hammer is a kind of candlestick that can be seen at the bottom of a downtrend.

It has no or a very small upper shadow.

A Hammer that forms at the top of an uptrend is called Hanging Man.

Hanging Man Candlestick with a small upper shadowTypical Hanging Man Candlestick with a Bullish BodyTypical Hanging Man Candlestick with a Bearish Body
Hammer and Hanging Man have three identifying features:

1. The body is in the upper third of the price range.

2. The lower shadow is twice of the length of the body at least.

3. They have no or a very short upper shadow.

Like Doji, Hammer and Hanging Man indicate indecision and uncertainty and need confirmation.

Hanging man at the top of a bull market

5. Shooting Star:

Indeed, Shooting Star is an inverted hammer formed at the top of an uptrend.

Its color can be Bullish or Bearish.

A Shooting Star at the bottom of a downtrend is called Inverted Hammer.

Like Doji and Hammer, Shooting Star and inverted Hammer have to be confirmed by the next candlestick(s).

Shooting Star with a Bearish Body     Shooting Star with a Bullish Body

A gap between the Shooting Star or Inverted Hammer and the next candlestick is one of the confirmations.

A big Bearish candlestick after the Shooting Star is another confirmation.

Generally, confirmation is something that confirms that the opposite party has taken the control and the price wants to change the direction.

A Shooting Star with a gap and then a confirmation candlestick

Candlesticks Patterns

Candlesticks are important signals individually.

However, combination of the candlesticks can also generate very strong reversal signals.

1. High-Wave

A group of candlesticks that have small bodies and long shadows are called High Wave.

High Wave is a very strong reversal signal at the top of an uptrend or bottom of a downtrend.

High Wave Candlestick Pattern

2. Engulfing Pattern

This pattern is a very strong reversal signal at the end of a trend.

Engulfing pattern is formed by two candlesticks with different colors.

The body of the second candlestick should completely engulf the first one.

The shadows may also be engulfed but it is not necessary.

The first candlestick can also be a Doji.

Bearish Engulfing Candlestick Pattern

Bullish Engulfing Candlestick Pattern

Engulfing pattern is stronger when the first candlestick has a small and the second candlestick has a big body.

Also when the second candlestick engulfs more than one candlestick, the pattern is stronger.

3. Dark Cloud Cover

Dark Cloud Cover is a bearish reversal signal that can be formed at the top of an uptrend by two candlesticks.

The first one is Bullish and the second one is Bearish.

Dark Cloud Cover is formed when the second candlestick is started above the high price of the first candlestick, but goes down and becomes finished above the open price of the first candlestick.

Dark Cloud Cover Candlestick Pattern

Dark Cloud Cover can be considered as a stronger reversal signal when:

1. The closing price of the bearish candlestick is close to the opening price of the previous candlestick.

2. Both candlesticks are shaven (they have no shadow) and the bearish candlestick is opened at the close of the bullish candlestick and is closed at the open of the bullish candlestick.

3. When the bearish candlestick is opened above a strong resistance and then goes down.

3. Piercing Line

A Dark Cloud Cover that forms at the bottom of a downtrend is known as Piercing Line.

Piercing Line Candlestick Pattern

A Typical Piercing Line

When you see a Dark Cloud Cover at the top of an uptrend or a Piercing Line at the bottom of a downtrend you have to wait for the next candlestick.

If the next candlestick after a Dark Cloud Cover is a Bullish candlestick that keeps on going up and goes higher than the high price of the second candlestick, then you should consider the Dark Cloud Cover is a continuation signal and has to be ignored as a reversal pattern.

Indeed, it is not a continuation pattern and is a reversal pattern in reality, but when it can’t change the price direction, it has to be ignored as a reversal signal.

But if the next candlestick after a Dark Cloud Cover is a Bearish candlestick that goes down and preferably lower than the close price of the second candlestick, then the Dark Cloud Cover you have is a reversal signal.

However, sometimes and under some special conditions, for example when the uptrend is already exhausted, a too strong Dark Cloud Cover that has also broken out of Bollinger Upper Band, is a strong reversal signal by itself and doesn’t have to be confirmed by the next candlestick.

The same thing is correct about the Piercing Line:

If the next candlesticks after a Piercing Line is a Bearish candlestick that goes down and goes lower than the close price of the second candlestick, then the Piercing Line you have is a continuation signal, or it has to be ignored as a reversal pattern.

But if the next candlestick after a Piercing Line is a Bullish candlestick that keeps on going up and preferably goes higher than the high price of the second candlestick in the Piercing Line, then the Piercing Line is a reversal signal.

4. Harami

“Harami” in Japanese means pregnant.

As a candlestick pattern forms by two candlesticks.

One big (the mother) and one small (the baby).

The bigger one covers the whole or at least the real body of the smaller one.

Harami can be seen both at the top of an uptrend or at the bottom of a downtrend.

The small candlestick can be formed anywhere along the length of the big candlestick.

But, the important thing here is that it should be covered by the big candlestick.

The more difference between the size of two candlesticks, the more effective and potent the signal is.

Harami Candlestick Pattern

Like the Dark Cloud Cover and Piercing Line, a Harami can work as reversal signal too, but it has to be confirmed by the next candlesticks.

Unlike the strong Dark Cloud Cover and Piercing Line that don’t even have to be confirmed by the next candlestick, Harami cannot be known as a reliable and strong reversal pattern, and has to be confirmed by the next candlestick to be considered as a reversal trade setup.

If you already have a position and you have some profit in your hands, when you see any of the above patterns, you have to close your trade or at least tighten your stop loss and wait for the market to go ahead.

If it changes the direction, you will be safe because you already collected your profit or your stop loss will protect your profit, and if it keeps on following the same direction, you will make more profit.

When the small candlestick in Harami pattern is a Doji, the pattern is called Harami Cross.

A long body candlestick followed by a Doji which is covered by the long candlestick should not be ignored at all:

Harami Cross

5. Morning and Evening Star and Abandoned Baby:

Morning Star forms by three candlesticks.

This pattern can be seen at the bottom of a downtrend.

It is known as a strong reversal signal.

1. The first candlestick should be a Bearish candlestick with a considerable body.

2. The second candlestick is a small candlestick that is formed lower than the first one.

This candlestick can be Bearish or Bullish.

In fact, Morning star is the second candlestick but we have to have the first and the second candlesticks to form a Morning Star signal.

3. The third candlestick is a Bullish candlestick that is formed higher than the second one and its body covers a significant portion of the first candlestick.

Morning Star Candlestick Pattern

Morning Star will be called Evening Star when formed at the top of an uptrend:

Evening Star Candlestick Pattern

The effectiveness and potency of the Morning Star and Evening Star patterns as reversal signals is dependent on some special factors that have to be considered:

1. The distance (gap) between the morning or evening star with the first and third candlesticks.

The bigger gap, the stronger signal.

2. The degree of the coverage of the first candlestick by the third one.

The bigger coverage, the stronger signal.

3. The bigger trading volume in the third candlestick than the first one.

Sometimes the Morning or Evening Star is a Doji candlestick.

Again in this case, the most important thing is the gap between the first and third candlestick and the Doji.

Sometimes, the Morning or Evening Star is a very small candlestick with small or no shadows.

The gap is so big and even none of the candlesticks shadows cover any part of the Morning or Evening Star.

This pattern is called Abandoned Baby which is a very strong reversal signal.

Because of the high volatility, this pattern is very rare in the markets and can only be seen in bigger time frames but it can be seen in the stock market in shorter time frames like one hour.

Abandoned baby can be seen both at the top of an uptrend or bottom of a downtrend.

Abandoned Baby Candlestick Pattern

6. Tweezers

Tweezers is made up of two candlesticks that are next or so close to each other.

They have identical highs at the top of the market or identical lows at the bottom of the market.

Tweezers usually forms by the candlesticks shadows, but it can also be made by the bodies of the shaven candlesticks.

The two candlesticks that form Tweezers can have small bodies like Doji and Hammer candlesticks.

Tweezers Candlestick Pattern

Tweezers cannot be considered as a strong reversal signal, and it needs confirmation, but you have to be careful when you see a Tweezers signal.

You know what I mean by “be careful”.

Tweezers that are formed right under resistance lines or above the support lines, and also under or above the Fibonacci levels that act as resistance or support levels, are important especially when they are made up of two Doji candlesticks.

The longer the shadows, the more potent the Tweezers signal.

It is also possible that you see a few or even several candlesticks between the two candlesticks that form the Tweezers pattern.

Even in this case you should not ignore the Tweezers as a potential reversal signal.

When there are several candlesticks between the two that make the Tweezers pattern, they may form Double Tops or Double Bottoms patterns that show the levels of resistance or support.

Tweezers in a Double Tops chart pattern

When the two candlesticks that form the Tweezers pattern have very long shadows that have strongly broken out of Bollinger Upper Band, then it should be considered as a strong reversal signal that doesn’t even have to be confirmed by the next candlestick.

The other thing about the Tweezers pattern is that you can barely find a pattern that the involved candlesticks have exactly the same high prices, and so their shadows are at the same level.

Maybe in the stock market you can find it more, but in the markets it is very rare because of the very high volatility.

You learned about the different kinds of Japanese candlesticks and their patterns.

Now…

What Next?

I think it is so easy to learn the different kinds of candlesticks and the patterns they form.

You can learn all of them in a few hours.

But something that you have to focus on more than learning the names and their meanings, is the psychological story that each candlestick tells you.

At the introduction of this article, I told you that candlesticks are the psychological indicators of the markets.

They reflect the emotions of the buyers and seller.

They tell you if traders are eager to buy or they have stopped buying and are waiting, or they have started selling like crazy.

This is the language of the candlesticks that you have to learn.

For example, let’s see how a Doji candlestick becomes formed.

As I already mentioned, Doji candlestick shows that the market is in an indecision status.

It means the price doesn’t know to go up or down.

Sometimes Buyers become stronger (they buy more) and the price goes up, and sometimes sellers become stronger (they sell more) and the price goes down.

Finally, the candlestick closes where the price is exactly at the same level that it opened.

Therefore, a Doji candlestick forms.

So, none of the buyers and sellers could take the control of the market.

That’s why they say Doji means indecision and you have to wait for the confirmation, because it is not clear if the price will go up or down after a Doji forms.

If the next candlestick closes as a relatively big Bearish (red) candlestick, it means Bears (sellers) succeeded to take the control finally and lowered the price.

If the next candlestick closes as a relatively big Bullish (green) candlestick, it means Bulls succeeded to take the control and increased the price.

So, the close price of is very important in candlesticks, specially in confirmation ones.

The close price tell you which party has taken the full control.

So What Does It Mean If the next Candlestick Closes as Another Doji?

It means the market is still in an indecision status and none of Bulls and Bears have been able to win yet.

So You Have to Learn to Understand the Story That Each Candlestick Tells You:

1. When you see a candlestick, first you should find the open, high, low and close prices.

2. Check the previous candlesticks and find out if the market has been Bullish (uptrend) or Bearish (downtrend).

3. Try to understand from the shape of the candlestick that if buyers (Bulls) are stronger or sellers (Bears) or none of them (indecision).

4. Then try to guess the color of the next candlestick using the above information.

5. If there is any candlestick pattern, like High Wave, Harami and … try to interpret them and guess the direction of the market.

6. Pay a lot of attention to the close price of each candlestick because it tells you who has taken the full control.

7. Do Not decide about a forming candlestick.

You have to wait for the candlestick to mature.

The shape and color of the candlesticks change several times during their formation

Therefore, you should analyse them only when they are fully formed.

My bottom-line advice for you is that if you cannot make any decisions and the market situation looks unknown and unpredictable to you, DO NOT force yourself to take any positions.

You will be wrong in most cases and you will lose money.

It doesn’t matter how long; just wait for a strong and sharp trade setup (signal).

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68 thoughts on “Candlestick Trading – The Language of Japanese Candlesticks
  1. Joshua says:

    Good day Mr Chris Pottorff. Thanks for the Article. I have studied this article extensively and I get the message clearly. I now understand what you mean by fear and greed. I believe I can predict the behaviour of a gragh based on this lesson. I want to confirm if its possible to only use candlestick for prediction, what role does Bollinger Band have with the candlesticks. Just to let you know how intensively I studied this article let me make a typographical correction, I saw ‘you’ appearing in the wrong place after Doji Rickshaw man. You wrote something like “so you when”. Sorry about that I don’t mean to be rude just a way of telling you how intense I studied this. Please Sir I will love to know the science behind the use of a platform for trading. E.g. ways of placing trading orders after figuring the movement of a graph. I will love to show you how you will affect my life. Thanks in advance.

    • LuckScout says:

      Hi Joshua, Thank you. Many professional traders use candlesticks only to trade. They do not even use the Bollinger Bands. However, Bollinger Bands is a great tool that confirms and complements the candlestick reversal patterns. For example, when there is a strong Dark Cloud cover pattern that has strongly broken out of the Bollinger Upper Band, we will go short with more confidence and peace of mind (compared to the time that we do not have the Bollinger Bands on our chart). It is recommended to read the below articles too:
      https://www.luckscout.com/how-to-use-bollinger-bands-in- -and-stock-trading/
      https://www.luckscout.com/doji-candlestick-doji-star-how-to-trade-using-doji-candlestick-and-bollinger-bands/

      We will have some training articles about using MT4 platform.

    • Charles Booth says:

      Hello hope all is well. Candle Stick Patterns with Bolligner Band Break outs are the core of our system. All candle stick patterns that do not break out are ignored. Hope this helps good luck.

      • Jovita Mbah says:

        Hi Chris,
        Thanks for the article. I just learnt from the article that CM is banned by US government. My question is, what will happen to retail brokers that have accounts with CM? will they lose their money?
        Regards

  2. Anil says:

    Can I use candlesticks and Bollinger Bands for Binary Options. Please advise.

  3. Asiri Kaluararchchi says:

    thanks Mr Chris Pottorff for this article.. It helped to me to understand candlesticks patterns. I had complicated with candlesticks patterns and after reading this article now I’ve clarify that patterns more.. oh sorry !! I didn’t read, I did study this… that’s why I could clarify..

    I have a question Mr Chris Pottorff

    1. how to formed gaps in the charts??
    2. Is It formed Only in daily time frame?? or usually form in M5, M15, H1 etc..?

    Looking for a answer..
    good luck..!!!!

    • Chris says:

      Thank you too.

      In the market we usually see the gap during the weekends and when the market opens on Sunday afternoon. It is because the market is closed to retail traders, but the currencies prices changes, and so we will see a gap when the new candles open at the beginning of the market on Sunday afternoon.

      Also, during the news release time that makes the price move strongly, sometimes we see gaps on the shorter time frames like 5min. It because the price changes very fast even when one candle is closed and the next one is opening. It is because of the volatility.

  4. Timothy says:

    Good thinking and good product!
    I believe this is a fresher to the memory and even suppose to be the beginning of learning how to trade
    Thank you and God bless you IJN amennnnn
    I am Timothy
    from Abeokuta Ogun State.Nigeria

  5. farah sehar says:

    thank you sir . it is very helpful article to understand the candlestick pattern. but iwant to study about gaps during trading after shootig stars in candlestick pattern

  6. Yaroslav says:

    It‘s a really detail and useful candlesticks article! I‘ve enjoyed it!
    Super! Thank you Chris! 🙂

  7. Yaroslav says:

    What color of hammer candlestick have to be?

  8. manish says:

    Nice Article…learnt a lot ! thanks again.

  9. Nejc says:

    Hi Chris, am i right that on gbp/cad today is forming double tops pattern?
    And god bless youuu for teaching us 😉

  10. Nejc says:

    its closed now, on a weekly chart is also form double top,but i am worry, because the middle band is acting like support on weekly chart,and on my weekly chart on 31.aug and 7.seb 2014 is form piercing line. what do you think.

  11. Shim says:

    Regarding the piercing line confirmation candlestick you wrote:

    If the next candlesticks after a Piercing Line is a Bearish candlestick that goes down and goes lower than the close price of the second candlestick, then the Piercing Line you have is a continuation signal.

    Is this correct ? The second candlestick on a piercing line should be a bullish candlestick, if it’s going lower (the confirmation candle) shouldn’t it go lower than the open price of the bullish candlestick. I might be confused without a picture though.

  12. Shalewa says:

    Hi Chris,

    Thank for sharing your knowledge, with regards to your response to Joshua’s post on above on April 25, 2014, please do you have any article on how to use the MT4 platform?

    Thanks.

  13. Shafique says:

    Hello Chris,
    I have following this site for last several months. Most of the time I visit this site when new articles published here. I have very serious issue that I need to get the answer from you. Most probably you can give the best answer to finish my thirsty. Sometimes I follow that same candles on different broker platforms show different pips in same size. Just for example Last daily chart candle on EURCAD on February 6, 2015 shows 184 pips on MT4 of one broker house platform but on the other hand it shows 1889 pips by another broker from up to bottom. This is very surprising to me. I was thinking to write about it but could not get time. If you answer then it will be very helpful to me

  14. Shafique says:

    Hello Chris, Would you please tell me that why this happens. I told you some days ago that I followed two price action in two different brokers. What is the main reason behind this? I have taken two position in two broker in same size from same price action. but till to this time the profit is far and far different in two broker. Why this happens? I am just confused of it. I have attached two photos of those my positions. Please answer me as soon as possible. This is for USDJPY currency only.

    https://dl.dropboxusercontent.com/u/212556891/USDJPY%201.jpg

    https://dl.dropboxusercontent.com/u/212556891/USDJPY%202.jpg

    • Chris says:

      This is strange. I checked everything and couldn’t find any reason. You have to ask the broker.

    • Michael . says:

      I know i’m months late with this reply, but i think i can explain the mystery.

      My first broker was MB Trading and i had opened a $10000 demo account. I soon learned that a “lot” represented not $100K, but $10K for some reason. I think the same is happening with the broker in the first screenshot. That means that the position size 0.03 is actually 0.003 “real” lot. If you multiply the profit in the first screenshot by 10, you get almost exactly the profit in the second screenshot.

  15. ola says:

    great work really interesting. my question is this what the best time chart to work with is analysis. 4 hours or daily or weekly. great work keep it up thanks. ola

  16. ik khan says:

    Dear respected sir what kind of chart is better for trading …5min ,15min, 30min, 1H, or 4H….?

  17. mkkhan says:

    sir please check the below chart. I am confused here.. waiting for your reply thank you sir.

    https://www.dropbox.com/s/okexdppzht5kl/Untitled.png?dl=0

    • Doji means indecision. It can go anywhere after a Doji. As the 2015.02.26 candlestick is strongly bearish, there is a higher probability that it goes down.

      • Michael . says:

        There are three dojis in a row, is this not a high wave pattern and thus a reversal signal? Although there is no real trend before the pattern, so there is nothing to reverse, maybe?

  18. Prakash says:

    Hi Chris,

    Could you please explain in detail about the psychology of the buyers and sellers for all candlestick types and patterns?

    This will really help me to understand candlestick better.

    thanks in advance.

  19. hani says:

    Hi,
    Do you’ve marubozu alert indicator or just display marubozu?
    regards

      • Charles Booth says:

        Hi Chris it’s Jason (Charles Booth) I was without internet the last four months but im back 🙂 Missed LuckScout in family. I have a question about the indacator, its kinda trivial however why is the little smiley face in the upper right hand upper corner a sad face? Thanks

        • Jason,

          Welcome back 🙂

          Is this the same account you have been using as Jason? If not, then I can help you not to miss any of the points you had earned with that account.

          Anyway!

          You have to click on “AutoTrading” button at the top to turn on the robot. Then the sad face will change to smiley face 🙂

          • Charles Booth says:

            I don’t think so because I see some of my old post and they are listed as Jason and my new post list as Charles however im sure i would of used the same primary email address Hope this help and thanks for looking into it for me means alot.

          • Charles,

            Yes, your comments are under Jason’s name and the same email address, but none of those who left comments on the site had any account at that time and they could leave comments without having an account. Your last comment under Jason name goes back to 2015/02/20 which is when you could leave a comment without having an account. If you had an account at that time with the same email address, then you could not sign up for a new account with that email address because you can only have one account with one email.

            Everything is OK Charles. Don’t worry 🙂

  20. Tafadzwa Chimuriwo says:

    It’s amazing how you learn new stuff by just going the same material over and over again. I went through the 5 steps. I am going through it all over again. Feels good.

    Thumbs up Chris and team!

  21. Pedro Daniel says:

    Hello.
    You wrote in another article that japanese candles can be used for trading stocks, gold, etc.

    I’m trying to start with fores, but is this system suitable to trade penny stocks, and binary options?.

    Thanks. Daniel

  22. titanium says:

    That’s really a perfect article. What still I don’t understand is, on the daily timeframe, how many days (candlesticks) I should consider before taking a position? Are 3 days enough to predict a position? Thanks again. This has become my favorite site.

  23. titanium says:

    The strong pattern you’re talking about is always the last one. So I should consider the last 1-2 days, right?

  24. marek herde says:

    Great refresher! Thank You 🙂

  25. Wayne Walter says:

    Chris,

    I think you should add this link:

    https://www.luckscout.com/doji-candlestick-doji-star-how-to-trade-using-doji-candlestick-and-bollinger-bands/

    To the section above on Evening Star and Morning Star.
    This post makes them much more clear.

    Wayne

  26. Gideon Alemede says:

    Hi,
    This is a classical piece to understanding the tremendous trading message a candlestick or group of candlesticks convey.It is worthy of note.

  27. Jose Fernandez says:

    No doubt, candlestick is one of amazing topics of LuckScout blog. I will keep on “range position” until I got everything about it, it does not matter the time it takes. Thanks Chris.

  28. Ashish Thakrar says:

    Great information…thanks chris…now I can understand what is importance of candlestick…wow

  29. N A says:

    Sir Chris, I RESPECT to you!!

  30. AHMED AL BAYATI says:

    Mr. Chris
    first of all thanks God for that good one who proposed this website for me, secondly, i`m from two or three weeks in this website reading all the good articles . i feel more confidence before to start applying your methodology on the chart. All of you ( the team ) behind this website, i`M AND ANYONE Struggling from their beginning in this section of life or business, are so thankful for you. because by your articles, you assure for us that you are the best in market for one simple reason, YOU ARE HELPING AND SAVING US AS A Novice traders from scams, thank you, all of you, very much and hope God bless all of you, in the same time i wish to be part of your team because you decide to help people for nothing which is very render nowadays.

  31. drsa1970 says:

    I reviewed this article so many times. that is great! thank you Mr.Chris …..

  32. Thomas Kamto says:

    Hii chriss. Wish to know … usually which TF is best accuracy for candle stick langauge ? Thxs

  33. red roses says:

    This is basic knowledge about Candlestick and you delivered it perfectly.

    Thank You So Much Chris. May God Bless You.

  34. Hey Ling says:

    Hi Chris & team,
    I have a question regarding hi-wave pattern. If the long shadow candles are broken up with some bigger bodies in between, ie we do not have the long shadow candles being consecutive, but are near each other, is it still valid as a hi-wave pattern?

    An example is EURJPY daily, 23 Nov 2015 – 30 Nov 2015, where the 26 Nov 2015 candle’s body seems too long and shadows too short to be a high wave candle.

    Thanks in advance!

  35. Hey Ling says:

    Hi Chris,

    Sorry I have another question regarding high wave pattern. EURUSD daily 17.07.2014 – 21.07.2014 seems to have a nice high wave pattern after a downtrend and the pattern also touches the BLB. Could you help to explain why the signal failed in this case and prices continued to dive further down instead of reverse? Thank you so much!!

  36. Bonee says:

    which time frame is good for candlestick pattern in bangladesh?