What is a Japanese candlestick?
A Japanese candlestick represents four prices over a given period: open, high, low and close. The body connects the open to the close. The wicks show the extremes.
A shape may be called a hammer, doji or engulfing pattern. The name describes a configuration, not a universal probability of price rising or falling.
According to CME Group's introductory course, a candlestick consists of a body and wicks: the body represents the open and close, while the wicks show the period's high and low. This definition is the stable foundation. Any interpretation then depends on the market and the method used.
Read the four prices without guessing
Start with observable data. A bullish candle closes above its open. A bearish candle closes below it. Colours depend on the platform and should never be the only reference.
- OOpenFirst price traded during the period.
- HHighHighest price reached during the same period.
- LLowLowest price reached before the period closes.
- CCloseFinal price recorded when the period ends.
Long body: the distance between open and close is large relative to the candle's range. Short body: the two prices are close. Long wick: the market explored an area before closing away from that extreme.
Five questions before naming the pattern
The same shape can appear during consolidation, after an impulse or around a monitored level. It therefore does not carry the same information everywhere.
A one-minute candle and a daily candle aggregate very different flows. Set the timeframe before testing.
Does the pattern occur after a rise, fall, range or gap? Describe that context without interpreting it after the fact.
Does the shape appear near a predefined level or in the middle of an area with no reference?
Before the close, the body and wicks can still change. A developing pattern is not a completed pattern.
The rule must specify what is expected next: a close, breakout, invalidation or no action.
Chart reading does not remove slippage, commissions or the risks inherent in leveraged futures.
20 candlestick patterns, classified without invented scores
Filter by family. Each card separates the observed shape, its traditionally associated context and what is still missing to build a testable rule.
Hammer
Traditional candlestick patternShape: small body with a long lower wick.
To confirm: bearish context, next close and invalidation level.
Inverted hammer
Traditional candlestick patternShape: small body with a long upper wick.
To confirm: reaction after a decline, then sustained trading above the area being studied.
Bullish engulfing
Traditional candlestick patternShape: the second bullish body engulfs the first bearish body.
To confirm: exact engulfing definition and the next close.
Piercing line
Traditional candlestick patternShape: bullish recovery into the previous bearish body.
To confirm: precise penetration threshold and gap conditions for the market being studied.
Morning star
Traditional candlestick patternShape: decline, transition candle, then bullish recovery.
To confirm: definition of the transition and position of the third close.
Bullish harami
Traditional candlestick patternShape: small bullish body contained within the previous bearish body.
To confirm: actual range contraction and behaviour of the next candle.
Shooting star
Traditional candlestick patternShape: small body and long upper wick after a rise.
To confirm: sustained rejection, next close and invalidation above the wick.
Hanging man
Traditional candlestick patternShape: small body and long lower wick after a rise.
To confirm: prior sequence and the close that follows. The shape alone resembles a hammer.
Bearish engulfing
Traditional candlestick patternShape: the second bearish body engulfs the first bullish body.
To confirm: engulfing method, bullish context and next close.
Dark cloud cover
Traditional candlestick patternShape: bearish move into the previous bullish body.
To confirm: penetration threshold and treatment of gaps for the instrument.
Evening star
Traditional candlestick patternShape: rise, transition, then bearish move.
To confirm: definition of all three stages and depth of the third close.
Bearish harami
Traditional candlestick patternShape: small bearish body contained within the previous bullish body.
To confirm: measured contraction and reaction of the next candle.
Standard doji
Traditional candlestick patternShape: open and close are very close.
To confirm: chosen numerical tolerance and context. A doji alone does not signal a reversal.
Long-legged doji
Traditional candlestick patternShape: small body with extended upper and lower wicks.
To confirm: range relative to recent volatility, not a fixed distance.
Dragonfly doji
Traditional candlestick patternShape: open and close near the high with a long lower wick.
To confirm: position in the sequence and reaction above the body.
Gravestone doji
Traditional candlestick patternShape: open and close near the low with a long upper wick.
To confirm: context, next close and invalidation level.
Three white soldiers
Traditional candlestick patternShape: three successive bullish bodies with progressively higher closes.
To confirm: overlap, relative size and absence of excessive extension.
Three black crows
Traditional candlestick patternShape: three successive bearish bodies with progressively lower closes.
To confirm: overlap, relative size and context preceding the sequence.
Rising three methods
Traditional candlestick patternShape: impulse, contained pullback, new push.
To confirm: accepted number of candles and pullback remaining within the initial range.
Falling three methods
Traditional candlestick patternShape: bearish impulse, contained rebound, new decline.
To confirm: definition of the rebound and close below the sequence.
Same shape, different reading
Similar names can be confusing. This matrix shows what actually separates the families without assigning them a generic success rate.
| Family | Observable shape | Required context | Confirmation question |
|---|---|---|---|
| Hammer / Hanging man | Small body, long lower wick | Decline for the hammer, rise for the hanging man | Does the next close confirm the rejection? |
| Inverted hammer / Shooting star | Small body, long upper wick | Decline for the inverted hammer, rise for the shooting star | Does price remain beyond the wick? |
| Engulfing | Second body around the first | Direction and sequence defined in advance | Must the body or the entire range be engulfed? |
| Harami | Small body inside the previous body | After an identifiable sequence | Is the contraction followed by a breakout? |
| Doji | Open and close are close | Anywhere, but with varying meaning | What numerical tolerance defines “close”? |
| Stars | Impulse, transition, opposing move | After a rise or decline | Where must the third candle close? |
| Three methods | Impulse, contained correction, resumption | Already observable trend | Does the pullback remain within the reference range? |
Build a candle with four prices
Change the values. The tool only calculates OHLC geometry: body direction, range and wicks. It does not generate market interpretations.
Period values
The high must be greater than or equal to the open and close. The low must be less than or equal to both.
Calculated locally in your browser. No value is sent or stored.
Turn a name into a verifiable rule
“I buy on a hammer” is not a rule. At a minimum, it lacks the market, timeframe, hammer definition, context, confirmation, invalidation and treatment of costs.
- Define the shape with numbersExample: body-to-range ratio, minimum wick length and doji tolerance.
- Lock the contextMarket, contract, session, timeframe, trend or area defined before observing the result.
- Specify confirmationClose of the next candle, break of a level or no action if the condition does not occur.
- Include invalidation and costsSlippage, commissions, fees, size and exit are part of the test. They must not be added afterwards.
- Separate construction from validationOne part of the data is used to build the rule, another to check that it does not depend solely on the initial sample.
- Keep all resultsDocument failures, adverse periods and changes. Selecting results after the fact distorts the analysis.
Six mistakes that make a pattern unusable
The candle can still change body, direction and wicks until its period has ended.
A hammer and a hanging man share the same shape. Their names depend in part on the move that precedes them.
“Long wick” must become a reproducible measurement before it can be tested.
Changing the rule to explain every failure creates a method fitted to the past, not necessarily a robust one.
A gross result does not reflect commissions, fees or execution differences.
A chart pattern does not automatically limit losses and guarantees no result.
A pattern does not replace account rules
If you trade through a prop firm, your chart method remains secondary to contractual limits: drawdown, daily loss, trading hours, instruments and payout conditions. Check the official version before purchase and before the session.
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Japanese candlestick FAQ
What is a Japanese candlestick?
A Japanese candlestick represents four prices over a given period: open, high, low and close. The body connects the open to the close, and the wicks show the period's extremes.
Which candlestick pattern is the most reliable?
There is no universally reliable pattern. Its usefulness depends on the market, timeframe, context, confirmation rule and costs. Any statistic must be tied to a documented testing method.
Should you wait for a candle to close?
A candlestick is only final once its period closes. Before then, its body and wicks can still change. The rule used must specify when the pattern is considered valid.
Which timeframe should you use for Japanese candlesticks?
Candlesticks exist on every timeframe. Choose one that is consistent with the market and horizon being studied, then test the same definition without changing it afterwards.
Does a doji signal a reversal?
No. A doji primarily describes an open and close that are close together. It may show hesitation, but it does not predict the next direction on its own. Context and the candles that follow are still necessary.
How do you test a candlestick pattern?
Define the pattern, market, timeframe, context, entry, exit and costs precisely. Then test on a sample separate from the one used to create the rule, and retain adverse results.
Sources and editorial method
- CME Group, « Chart Types: Candlestick, Line, Bar », accessed July 17, 2026: candlestick structure, body, wicks and OHLC data.
- Commodity Futures Trading Commission, « Basics of Futures Trading », accessed July 17, 2026: how futures contracts work and their risks.
- CFTC, « Commodity Trading Systems Sold on the Internet », accessed July 17, 2026: caution regarding systems promising high profits with little risk.
Pattern names and drawings follow common technical-analysis terminology. No success percentage is published without a verifiable dataset, definition, period and testing protocol.