Candlestick Patterns

What is it?

Candlestick patterns are formed by one or more candles and reveal the battle between buyers and sellers. Bullish patterns (Hammer, Engulfing, Morning Star) at support suggest reversals. Bearish patterns (Shooting Star, Evening Star, Bearish Engulfing) at resistance signal potential pullbacks. AIShare detects 14 patterns automatically.

Why it matters

Candlestick patterns (weight 1.0) are SECONDARY in AIShare but add crucial timing precision. They're the final confirmation before entering a trade — you might see bullish EMA + oversold RSI, but wait for a Hammer or Engulfing candle to pull the trigger.

Key parameters

How to use

1. 1Bullish Engulfing at support = Strong reversal signal
2. 2Hammer at the bottom of a downmove = Buyers stepping in
3. 3Morning Star (3-candle) = Classic bottom reversal
4. 4Bearish Engulfing at resistance = Sellers taking control
5. 5Shooting Star at top = Rejection candle, potential reversal
6. 6Doji at key level = Indecision — wait for next candle confirmation

Signals (6)

Swing trading tips

• Always check WHERE the pattern forms — pattern at support/resistance >> pattern in the middle
• Use candlestick patterns as entry triggers AFTER indicators confirm direction
• Multiple patterns in same area = stronger signal
• Three White Soldiers = strong multi-day bullish reversal — good swing entry

Common mistakes to avoid

• Trading patterns without context — WHERE they appear matters more than WHAT they look like
• Treating a single candle pattern as a guaranteed signal — always wait for confirmation
• Not checking volume on pattern candles — patterns with volume are more reliable

Video tutorials (3)

• Candlestick Patterns for Beginners — Complete Course

  Trading Rush

• The Only Candlestick Patterns You Need to Know

  Rayner Teo

• Japanese Candlestick Patterns — Full Guide

  The Trading Channel

Third-party tutorials — linked for educational reference. AIShare is not affiliated with these creators.

Quick quiz — test your Candles knowledge

5 questions. Pass with 3 out of 5 for a completion badge.

1. 1A Bullish Engulfing at a known support level is most useful as…

   AA random indicatorBA confirmation of a potential reversal — not a guaranteeCA guaranteed 10% moveDA sell signal

2. 2A Doji represents…

   AStrong directional convictionBIndecision — buyers and sellers in balanceCA data errorDA dividend

3. 3A Morning Star pattern is…

   AA single-candle bearish signalBA three-candle bullish reversal patternCA volume indicatorDA chart overlay

4. 4Candlestick patterns are most reliable when they form…

   AAnywhere on the chartBAt key support / resistance levelsCOnly on MondaysDOnly on pre-market data

5. 5Best practice is to treat a candle pattern as…

   AA guaranteed trade triggerBOne input in a multi-factor setupCA replacement for a stop lossDA fundamental analysis tool

Educational self-assessment only — not a regulated qualification.