What does a doji candlestick mean?

A doji forms when a candle's open and close are nearly identical, producing a very small body with wicks on either side. It signals indecision between buyers and sellers and is most meaningful when it appears after an extended trend, hinting the move may be losing momentum.

What is a bullish engulfing pattern?

A bullish engulfing pattern is a red candle followed by a larger green candle whose body fully covers the prior red candle's body. It signals a sharp shift from selling pressure to buying pressure and is generally more significant when it forms at a well-established support level.

Do candlestick patterns work on their own?

Rarely. A pattern's reliability increases significantly when it forms at a meaningful location — a tested support or resistance level — and is confirmed by rising volume. The same shape appearing in the middle of a trading range with no context carries far less weight.

June 1, 2026·8 min read·By WideRadar

Candlestick Patterns Explained: The Shapes That Signal Reversals

Doji, hammer, engulfing — candlestick names sound cryptic, but each shape encodes real information about the fight between buyers and sellers. Here's how to read the most important ones.

Candlestick charting originated in 18th-century Japanese rice markets and remains the standard way to visualize price today. Each candle's shape — the size of its body and the length of its wicks — tells you something about the battle between buyers and sellers during that period, beyond what a simple line chart shows.

Reading a single candle

A candle with a small body and long wicks on both ends shows indecision — buyers and sellers fought to a near draw. A candle with a large body and short wicks shows conviction — one side controlled the entire period. The doji (open ≈ close, long wicks) is the purest indecision signal, often appearing near turning points after a strong trend.

Reversal patterns at the bottom

Hammer — small body near the top of the range, long lower wick; sellers pushed price down but buyers reclaimed it by the close. Bullish after a downtrend.
Bullish engulfing — a red candle followed by a larger green candle that fully engulfs its body; a sharp shift from selling to buying pressure.
Morning star — a three-candle sequence: a large red candle, a small indecisive candle, then a large green candle, marking a potential bottom.

Reversal patterns at the top

Shooting star — small body near the bottom of the range, long upper wick; buyers pushed price up but sellers took it back by the close. Bearish after an uptrend.
Bearish engulfing — a green candle followed by a larger red candle that fully engulfs it; the mirror image of bullish engulfing.
Evening star — the mirror of the morning star, marking a potential top.

Context matters more than the shape alone

A hammer in the middle of a trading range means far less than a hammer forming exactly at a well-tested support level on rising volume. Candlestick patterns are a vocabulary for describing what happened during a period — they become genuinely useful only when read together with the surrounding trend, nearby support and resistance, and confirming volume.

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