Module 4: Technical Analysis
Candlestick Patterns
7 min read
Each candlestick shows the open, high, low and close for a period. Patterns describe how buyers and sellers behaved.
Anatomy of a candle
The body spans the open and close. The wicks (shadows) show the high and low. A bullish candle closes above its open; a bearish candle closes below.
Common patterns
A doji has almost equal open and close, showing indecision. A hammer has a small body and long lower wick, showing rejection of lower prices. An engulfing pattern is a candle whose body fully covers the previous one, showing a shift in control.
Patterns are more meaningful at important levels and should be confirmed. No pattern works every time.
Key takeaways
- Candles show open, high, low and close.
- Wicks show rejected prices.
- Patterns matter most at key levels.
Educational content only, not financial advice. Trading forex and CFDs involves significant risk of loss.