Candlestick chart patterns are essential tools for traders to predict market movements. Here are some fundamental patterns to know:

1. Doji

Indicates market indecision. The opening and closing prices are equal. Types include Standard, Long-Legged, Dragonfly, and Gravestone.

2. Hammer and Hanging Man

  • Hammer: Appears at the bottom of a downtrend with a small body and long lower shadow, signaling a potential upward reversal.

  • Hanging Man: Appears at the top of an uptrend with a similar shape, indicating a potential downward reversal.

3. Engulfing Patterns

  • Bullish Engulfing: A small red candle followed by a larger green one, signaling an uptrend.

  • Bearish Engulfing: A small green candle followed by a larger red one, signaling a downtrend.

4. Morning Star and Evening Star

  • Morning Star: A three-candle pattern (long red, small-bodied, long green) indicating an upward reversal.

  • Evening Star: A three-candle pattern (long green, small-bodied, long red) indicating a downward reversal.

5. Three Black Crows and Three White Soldiers

  • Three Black Crows: Three consecutive long red candles signaling a strong downtrend.

  • Three White Soldiers: Three consecutive long green candles signaling a strong uptrend.

6. Shooting Star and Inverted Hammer

  • Shooting Star: Appears at the top of an uptrend with a small body and long upper shadow, indicating a potential downward reversal.

  • Inverted Hammer: Appears at the bottom of a downtrend with a similar shape, signaling a potential upward reversal.

Understanding these patterns can help traders make better decisions and enhance their trading strategies.