Candlestick Patterns PDF

More Information About Book:

Name of BookCandlestick Patterns PDF
Name of AuthorRayner teo
Language of BookEnglish
Size of Book1 MB
Total pages in Ebook34
Category of BookTechnical
Source Archive

The Monster Guide to Candlestick Patterns

“The Monster Guide to Candlestick Patterns” by Rayner Teo provides a comprehensive guide to understanding and utilizing candlestick patterns in trading. In this comprehensive guide, we’ll explore various candlestick patterns, their meanings, and how to use them effectively in your trading strategy.

What Is a Candlestick Pattern?

Candlestick patterns originated in Japan during the 1700s and were later introduced to the Western world by Steve Nison. These patterns provide valuable insights into market sentiment and potential price reversals. Each candlestick has four data points:

  • Open: The opening price.
  • High: The highest price during a specific time period.
  • Low: The lowest price during that time.
  • Close: The closing price.


  • Bullish candlestick patterns have the open below the close.
  • Bearish candlestick patterns have the open above the close.

Bullish Reversal Candlestick Patterns

These patterns suggest a temporary shift in favor of buyers. However, it’s essential to combine them with other tools for high-probability trading setups. Here are five bullish reversal patterns:

  1. Hammer: A single bullish candlestick that forms after a price decline.
  2. Bullish Engulfing Pattern: A two-candle pattern where the second candle engulfs the first.
  3. Piercing Pattern: A two-candle pattern with a strong bullish second candle.
  4. Tweezer Bottom: Two or more candlesticks with identical lows.
  5. Morning Star: A three-candle pattern signaling a potential trend reversal.

Bearish Reversal Candlestick Patterns

These patterns indicate a potential shift in favor of sellers. Similar to bullish patterns, combine them with other tools for better results. Here are five bearish reversal patterns:

  1. Shooting Star: A single bearish candlestick after an uptrend.
  2. Bearish Engulfing Pattern: The opposite of the bullish engulfing pattern.
  3. Dark Cloud Cover: A two-candle pattern with a bearish second candle.
  4. Tweezer Top: Two or more candlesticks with identical highs.
  5. Evening Star: A three-candle pattern signaling a potential downtrend.

Indecision Candlestick Patterns

These patterns suggest uncertainty in the market. Examples include the Doji, Spinning Top, and Harami patterns.

Trend Continuation Candlestick Patterns

These patterns indicate that the existing trend is likely to continue. Examples include the Bullish Marubozu and Bearish Marubozu.

Candlestick Cheat Sheet

To understand any candlestick pattern without memorizing each one, refer to a cheat sheet. It summarizes the key features of various patterns.

Remember, mastering candlestick patterns takes practice. Combine them with other technical analysis tools, risk management, and a solid trading plan for consistent success.

Now you’re armed with the knowledge to navigate the fascinating world of candlestick patterns. Happy trading! 🕯️📈

Read Also: 1. 32 Candlestick Pattern PDF Free 2. Simple Trading Book Patterns PDF


Japanese candlestick patterns originated from a Japanese rice trader called Munehisa Homma during the 1700s. Almost 300 years later, it was introduced to the western world by Steve Nison in his book called “Japanese Candlestick Charting Techniques.

The original ideas have likely been modified over time, resulting in the candlestick patterns used today. That’s a brief history behind Japanese candlestick patterns. Moving on…


Every candlestick pattern has 4 data points:

  1. Open – The opening price
  2. High – The highest price over a fixed time period
  3. Low – The lowest price over a fixed time period
  4. Close – The closing price

Here are 5 bullish reversal candlestick patterns you should know:

  1. Hammer
  2. Bullish Engulfing Pattern
  3. Piercing Pattern
  4. Tweezer Bottom
  5. Morning Star

A Hammer is a (1-candle) bullish reversal pattern that forms after a decline in price. Here’s how to recognize it:

  • Little to no upper shadow
  • The price closes at the top ¼ of the range
  • The lower shadow is about 2 or 3 times the length of the body

What a Hammer means:

  1. When the market opens, sellers took control and pushed the price lower.
  2. At the selling climax, huge buying pressure stepped in and pushed the price higher.
  3. The buying pressure is so strong that it closed above the opening price.

In short, a hammer is a bullish reversal candlestick pattern that shows rejection of lower prices. However, seeing a Hammer doesn’t mean the trend will reverse immediately. You’ll need more “confirmation” to increase the odds of the trade working out, and I’ll cover that in detail later. Moving on…

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