Why You Need a Candlestick Patterns Cheat Sheet
There are over 50 documented candlestick patterns. You don't need to memorise all of them. In fact, trying to memorise them all will make you worse at trading, not better — because you'll start seeing patterns everywhere, even where they don't exist.
What you need are the 15 patterns that actually matter in forex. The ones that institutional traders watch. The ones that consistently produce results when combined with proper context (trend, support/resistance, volume).
This cheat sheet gives you exactly that. No filler patterns. No obscure three-candle formations that appear once a year. Just the essentials, explained clearly.
Single-Candle Patterns (Reversal Signals)
1. Hammer
What it looks like: Small body at the top of the candle, long lower wick (at least 2x the body length), little or no upper wick.
What it means: Sellers pushed price down significantly during the period, but buyers fought back and closed near the high. It signals potential buying pressure.
When it works: At the bottom of a downtrend, near a support level. A hammer in the middle of a range is meaningless.
When it lies: In a strong downtrend with no nearby support. One hammer doesn't reverse a trend — you need confirmation (the next candle closing above the hammer's high).
2. Inverted Hammer
What it looks like: Small body at the bottom, long upper wick, little or no lower wick.
What it means: Buyers tried to push price up but sellers pushed it back down. However, the fact that buyers attempted a move up after a decline suggests the selling momentum may be weakening.
When it works: After a downtrend, especially near support. Needs confirmation — the next candle should close above the inverted hammer's body.
3. Shooting Star
What it looks like: Identical to an inverted hammer, but appears at the top of an uptrend. Small body at the bottom, long upper wick.
What it means: Buyers pushed price up but were overwhelmed by sellers who drove it back down to close near the low. Signals potential bearish reversal.
When it works: At the top of an uptrend or near resistance. The longer the upper wick relative to the body, the stronger the signal.
4. Hanging Man
What it looks like: Identical to a hammer (small body at top, long lower wick), but appears at the top of an uptrend.
What it means: Despite closing near the high, the long lower wick shows sellers temporarily took control. The uptrend may be weakening.
When it works: After a sustained move up, especially near resistance. Confirmation is critical — wait for the next candle to close below the hanging man's body.
5. Doji
What it looks like: Opening and closing prices are nearly identical, creating a cross or plus-sign shape. The wicks can vary in length.
What it means: Complete indecision. Neither buyers nor sellers won the period. On its own, a doji is neutral — its meaning depends entirely on what came before it.
When it works: After a strong trend (either up or down), a doji signals that momentum is stalling. Combined with a support/resistance level, it can indicate a reversal. In a sideways market, dojis are noise.
Two-Candle Patterns (Stronger Signals)
6. Bullish Engulfing
What it looks like: A small bearish candle followed by a larger bullish candle that completely "engulfs" the first candle's body (opens below the first candle's close and closes above the first candle's open).
What it means: Buyers completely overwhelmed sellers. The bigger the engulfing candle relative to the first, the stronger the signal.
When it works: At the bottom of a downtrend, near support. One of the most reliable single-pattern signals in forex — but only with context.
7. Bearish Engulfing
What it looks like: A small bullish candle followed by a larger bearish candle that engulfs the first candle's body.
What it means: Sellers overwhelmed buyers. Signals potential bearish reversal.
When it works: At the top of an uptrend, near resistance. Look for increased volume on the engulfing candle for confirmation.
8. Tweezer Tops
What it looks like: Two consecutive candles with nearly identical highs. The first is bullish, the second is bearish.
What it means: Price tried to break higher twice and failed at the same level. That level is acting as resistance, and the second bearish candle shows sellers are taking control.
When it works: At the top of an uptrend, especially when the matching highs align with a known resistance level.
9. Tweezer Bottoms
What it looks like: Two consecutive candles with nearly identical lows. The first is bearish, the second is bullish.
What it means: Price tried to break lower twice and was rejected at the same level. Support is holding, and buyers are stepping in.
Three-Candle Patterns (High Conviction)
10. Morning Star
What it looks like: Three candles — (1) a large bearish candle, (2) a small-bodied candle (can be bullish or bearish) that gaps lower, (3) a large bullish candle that closes above the midpoint of the first candle.
What it means: The downtrend exhausts (first candle), indecision follows (second candle), and buyers take over (third candle). Classic bottom reversal.
When it works: After a sustained downtrend, near support. In forex, you may not always see a clean gap, but the pattern still works if the second candle has a noticeably small body.
11. Evening Star
What it looks like: The bearish mirror of the morning star — (1) large bullish candle, (2) small-bodied candle, (3) large bearish candle closing below the midpoint of the first.
What it means: The uptrend exhausts, indecision appears, and sellers take control. Classic top reversal.
12. Three White Soldiers
What it looks like: Three consecutive bullish candles, each opening within the previous candle's body and closing higher than the previous candle's close.
What it means: Strong, sustained buying pressure. Each candle shows buyers in control from open to close, with no significant pullback.
When it works: After a downtrend or consolidation, as a trend reversal signal. The candles should have reasonably sized bodies (not tiny). If the third candle has a long upper wick, the momentum may be weakening.
13. Three Black Crows
What it looks like: Three consecutive bearish candles, each opening within the previous candle's body and closing lower.
What it means: The bearish mirror of three white soldiers. Strong selling pressure across three periods.
Continuation Patterns
14. Rising Three Methods
What it looks like: A large bullish candle, followed by three small bearish candles that stay within the range of the first candle, followed by another large bullish candle that closes above the first candle's high.
What it means: The uptrend paused for a brief pullback, but sellers couldn't push price below the range of the initial move. Buyers resume control. This is a continuation signal — the trend is intact.
15. Falling Three Methods
What it looks like: The bearish mirror — large bearish candle, three small bullish candles within its range, then another large bearish candle.
What it means: The downtrend paused but resumed. Continuation of the bearish trend.
The Most Important Rule: Context Is Everything
A candlestick pattern without context is worthless. A hammer at a random price level means nothing. A hammer at a major support level, after a clean downtrend, with RSI showing oversold conditions — that's a trade setup.
Always ask three questions before acting on a pattern:
1. Where is it on the chart? Patterns at key support/resistance levels are far more significant than patterns in the middle of nowhere.
2. What's the trend? Reversal patterns work best when there's actually a trend to reverse. A bullish engulfing in a sideways market is just noise.
3. Is there confluence? Does the pattern align with other signals — a trendline, a moving average, a Fibonacci level, an RSI divergence? The more factors agree, the higher the probability.
Let AI Spot the Patterns You Miss
Even experienced traders miss patterns — especially on timeframes they don't usually watch, or when they're tired and trading at the end of a long session.
The Gopipways AI Chart Analysis scans any chart you upload and identifies every candlestick pattern present, along with the support/resistance levels, trend direction, and other technical factors that give the pattern context.
It doesn't just say "there's a hammer here." It tells you whether that hammer is significant based on where it appears, what the trend is doing, and what other confluences exist. That's the difference between pattern recognition and actual analysis.
Combine this with the Candlestick Patterns lesson in the Gopipways Academy, and you'll go from memorising shapes to understanding market psychology.
👉 Upload a Chart for Instant Pattern Analysis →
Don't just memorise patterns — understand what the market is telling you.
