How are candlestick patterns composed? Candlesticks!

Candlestick patterns are part of a way to represent market prices : the candlestick charts.
The best way to chart candlestick is using the TradingView solution. It lets you chart candlestick and all other charting types and you can try it now for free.

A candlestick is a way to represent an aggregation of all the prices traded for a given time period. It can for example aggregate a full trading day of prices. During this time period (which can take any value, from 1 minute to a few months), instead of showing every single price traded, a candlestick will only show 4 price values :

• High : the highest price reached during this period
• Low : the lowest price reached during this period
• Open : the first price traded during this period
• Close : the last price traded during this period

The area inside the open and close is the body. It’s often represented as filled and is either green or red depending on whether the market was bullish (went up) or bearish (went down). Outside of the body are the wick and tail (or sometimes called upper shadow and lower shadow). The upper shadow is from the body top to the highest price, the lower shadow is the opposite. They can create bullish candles or bearish candles. Candles help traders understand how the buying and selling pressure is applied during the given time interval.

How can they help you enhance your trading strategy?

Depending on the pattern (each pattern can tell a different story), they can be a hint for :

• Reversal : it predicts price will reverse and move in the opposite direction
• Continuation : it predicts price will continue its move in the same direction

To learn more check out our candlestick chart article or signup to Joe Marwood’s course “Candlestick Analysis For Professional Traders” (he has more than 40k followers on Twitter so he knows what he talks about). He’ll tour you around with videos about the backtesting of 26 candlestick patterns.

Want to go into the details of a specific pattern. You’re at the right place!
These patterns often have colorful names. Feel free to discover the detailed article for each candlestick pattern right below :