Candle Cheat-Sheet

Meaning · Long lower wick shows sellers pushed price down but buyers absorbed and closed near the high.

Context · After a downtrend, near support or the lower Keltner band. Best on volume.

Meaning · Long upper wick after a decline — buyers tried to push but sellers capped it. A test of the highs.

Context · After a downtrend; needs a strong bullish confirmation candle the next day.

Meaning · A larger green body completely engulfs the prior red body — buyers reclaimed all of sellers' work.

Context · After a downtrend. Stronger when the engulfing candle has high relative volume.

Meaning · Green candle opens below prior low and closes above the midpoint of the prior red body.

Context · After a downtrend. Half-strength bullish engulfing — needs confirmation.

Meaning · Down candle → small-bodied indecision (the star) → strong up candle. Three-bar reversal.

Context · Classic bottom signal after a downtrend, especially at major support.

Meaning · Three consecutive strong green candles, each opening within the prior body and closing higher.

Context · After a basing period or downtrend. Caution if appearing into resistance (could be exhaustion).

Meaning · Small green body sits inside the prior large red body — selling momentum is fading.

Context · After a strong down move. Wait for a follow-through candle.

Meaning · Two candles with matching lows — buyers defended the same price twice. A short-term floor.

Context · At support or a prior swing low. Tighter the match, stronger the signal.

Meaning · A red candle followed by a green candle that gaps up and opens above the prior open. Violent reversal.

Context · Often news-driven (earnings beat, upgrade). Among the strongest reversal signals.

Meaning · Bullish harami confirmed by a third candle closing above the harami's high.

Context · Higher reliability than a bare harami because of the confirmation bar.

Meaning · Bullish engulfing confirmed by a third up-close — sellers have lost control.

Context · Among the most reliable three-bar bottoms.

Meaning · Open, close, and high are nearly identical with a long lower wick — full intraday rejection of lows.

Context · At support after a decline. Confirm with the next candle's direction.

Meaning · Doji gapped below the prior red and the following green — an island reversal at the bottom.

Context · Rare and powerful. Best when it appears at major support.

Meaning · Long upper wick after a rally — buyers tried but sellers slammed it back down.

Context · After an uptrend, near resistance or the upper Keltner band.

Meaning · Hammer-shaped candle (long lower wick) but appearing at the top of an uptrend — late longs unwinding.

Context · After a sustained rally. Needs bearish confirmation on the next bar.

Meaning · A larger red body completely engulfs the prior green body — sellers wiped out buyers' progress.

Context · After an uptrend. Stronger with high relative volume and at resistance.

Meaning · Red candle opens above prior high and closes below the midpoint of the prior green body.

Context · After an uptrend. Bearish engulfing's lighter cousin — confirm with follow-through.

Meaning · Up candle → small star → strong down candle. Classic three-bar top reversal.

Context · At resistance after an extended uptrend. One of the most-watched topping signals.

Meaning · Three consecutive strong red candles, each opening within the prior body and closing lower.

Context · Top of an uptrend or a breakdown from a base. Trend has flipped.

Meaning · Small red body sits inside the prior large green body — buying pressure is exhausted.

Context · After a strong up move. Wait for a follow-through down candle.

Meaning · Two candles with matching highs — sellers defended the same price twice. Short-term ceiling.

Context · At resistance or a prior swing high.

Meaning · Green candle followed by a red that gaps down and opens below the prior open. Violent reversal.

Context · Usually news-driven (miss, downgrade, geopolitics).

Meaning · Bearish harami confirmed by a third candle closing below the harami's low.

Context · Higher reliability than a bare harami.

Meaning · Bearish engulfing confirmed by a third down-close — buyers have lost control.

Context · Among the most reliable three-bar tops.

Meaning · Open, close, and low are nearly identical with a long upper wick — full intraday rejection of highs.

Context · At resistance after a rally. Confirm with the next candle.

Meaning · Doji gapped above the prior green and the following red — island reversal at the top.

Context · Rare and powerful. Best at major resistance.

Meaning · Full-body green candle with no wicks — buyers controlled from open to close.

Context · Mid-uptrend or breakout from consolidation. Trend likely continues.

Meaning · Big green, three small reds that stay within the first candle's range, then another big green.

Context · Healthy mid-trend pullback. The fifth bar's close above the first signals continuation.

Meaning · Like rising three methods but with a small upward gap on the second candle — even stronger.

Context · Strong-trend continuation. Confirms buyers remain in control through the pullback.

Meaning · Second candle opens above prior high — a price gap (window) in the direction of the trend.

Context · In uptrends, gaps often act as support. Pullbacks into the gap are buyable.

Meaning · Two similarly-sized green candles open at the same level after an up-gap.

Context · Confirms the gap will hold; trend continuation expected.

Meaning · Full-body red candle with no wicks — sellers controlled from open to close.

Context · Mid-downtrend or breakdown from consolidation. Trend likely continues.

Meaning · Big red, three small greens that stay within the first candle's range, then another big red.

Context · Healthy downtrend bounce. The fifth bar's close below the first signals continuation lower.

Meaning · Second candle opens below prior low — a price gap (window) in the direction of the trend.

Context · In downtrends, gaps often act as resistance on bounces.

Meaning · Two similarly-sized red candles open at the same level after a down-gap.

Context · Confirms the gap will hold; trend continuation expected.

Meaning · Open and close are virtually identical — buyers and sellers are in balance.

Context · By itself, a pause. At extremes (overbought/oversold), often precedes a reversal.

Meaning · Small body with long upper and lower wicks — high indecision with neither side winning.

Context · After a strong trend, signals momentum is fading; watch the next candle for direction.

Meaning · Doji with very long wicks on both sides — extreme intraday volatility resolved at unchanged.

Context · Often appears at major inflection points. Confirmation required.