Forex Candlestick Patterns Explained (Examples)

Last updated: July 1, 2026

Forex candlestick patterns are shapes that one, two, or three candles form on a price chart to hint at a possible reversal, continuation, or indecision. The common ones are the Doji, Hammer, Pin Bar, Engulfing pattern, Morning Star and Evening Star, and the Marubozu. Each describes a shift in who — buyers or sellers — controlled the period.

Key takeaways

• A candlestick shows four prices for one period — open, high, low, close. The body is the open-to-close range; the wicks (shadows) are the extremes beyond it.
• Patterns fall into three families: bullish reversal (Hammer, Bullish Engulfing, Morning Star, bullish Pin Bar), bearish reversal (Shooting Star, Bearish Engulfing, Evening Star, bearish Pin Bar), and continuation/indecision (Marubozu, Doji variants).
• Location decides meaning. A Hammer at the bottom of a downtrend is bullish; the identical shape at the top of an uptrend is a Hanging Man and bearish. Read the candle and where it sits.
• No pattern is a guarantee. Reliability is context-dependent — it rises when a pattern forms at support/resistance with confirmation, and falls when it floats in open space.
• On XAU/USD (gold), long wicks are normal, so single-candle patterns like the Hammer and Doji throw more false signals — demand extra confirmation.
• Want to trade these shapes, not only recognise them? See our companion guide on how to trade candlestick patterns.

This page is the reference — what each pattern is, how to spot it, and where it works. If you already know the shapes and want the entry-and-exit rules, the linked how-to guide covers confirmation, stops, and sizing.

Anatomy of a candlestick

Before any pattern makes sense, you need to read a single candle. Every pattern below is two, three, or four of these stacked in a recognisable way.

A candle packs four prices into one shape: the open, the high, the low, and the close for that period. Read those four points and you have read the candle.

The body is the thick part — the distance between the open and the close. A long body means one side dominated the period. A short body means buyers and sellers fought to a draw.

The wicks (also called shadows) are the thin lines above and below the body. They mark the high and low that price reached but could not hold. A long lower wick means sellers pushed price down, then buyers rejected it back up.

Colour tells you direction at a glance. A bullish candle (usually green or white) closes above its open — buyers won. A bearish candle (usually red or black) closes below its open — sellers won.

Here is the read most beginners get wrong: a long wick is a rejection, not a continuation. When you see a long lower wick, sellers tried to push price down and failed — and that failure is often more informative than the body itself. New to chart-reading? Start with our beginner’s guide to technical analysis, which covers trend, structure, and support/resistance first.

Bullish reversal patterns

These form after a downtrend and hint that sellers are losing control. The key word is hint — they signal a possible turn, not a certainty, and only carry weight at the bottom of a move or at a support level.

Hammer

A Hammer is a single candle with a small body near the top and a long lower wick — at least twice the body length — with little or no upper wick. It appears at the bottom of a downtrend.

The story: sellers drove price down hard during the period, then buyers stepped in and pushed the close back up near the open. That rejection of lower prices is the bullish tell. A green Hammer is marginally stronger than a red one, but the shape matters more than the colour.

Example: on EUR/USD H1, price has been falling for six candles. The seventh opens, dips 40 pips, then closes only 5 pips below its open — leaving a long lower wick. That is a Hammer, and it warns the downtrend may be exhausting.

Bullish Pin Bar

A Pin Bar (pinocchio bar) is close kin to the Hammer: a single candle with a small body and one long wick that sticks out from the surrounding price. A bullish Pin Bar has its long wick pointing down, rejecting lower prices.

The difference from a strict Hammer is looseness — a Pin Bar can have a small opposite wick and the body can sit slightly off-centre. Traders use “Pin Bar” as the broader price-action label; a Hammer is a Pin Bar that meets the stricter shape rules at a downtrend bottom.

Bullish Engulfing

A Bullish Engulfing pattern is two candles: a smaller bearish (red) candle, then a larger bullish (green) candle whose body fully engulfs the prior candle’s body. The green body opens at or below the previous close and closes at or above the previous open.

It shows a sharp swing from selling to buying — in one period, buyers erased the prior candle’s losses and overwhelmed them. Note it is body engulfment that matters, not the wicks. The bigger the engulfing candle relative to the one it swallows, the stronger the signal.

Morning Star

A Morning Star is a three-candle bottom reversal: a long bearish candle, then a small-bodied candle (the “star,” often a Doji) that stalls, then a long bullish candle that closes well into the first candle’s body.

The middle candle is the pivot — it marks the moment selling momentum stalled. The third candle confirms buyers have taken over. Because it needs three candles to complete, it is slower but generally more reliable than a single Hammer.

Bearish reversal patterns

These are the mirror images. They form after an uptrend and warn that buyers may be exhausted. Trade them only near the top of a move or at resistance.

Shooting Star and Hanging Man

A Shooting Star is a single candle with a small body near the bottom and a long upper wick — at least twice the body length — at the top of an uptrend. The long upper wick shows buyers pushed price up, then sellers rejected it back down. It is the bearish mirror of the Hammer.

A Hanging Man shares the Hammer’s shape — small body, long lower wick — but appears at the top of an uptrend. The lower wick shows sellers tested lower prices mid-uptrend, a first crack in buyer control. Same shape as a Hammer, opposite location, opposite meaning — proof that context is everything.

Bearish Pin Bar

A bearish Pin Bar is the Pin Bar with its long wick pointing up, rejecting higher prices, at the top of a move or at resistance. The Shooting Star is the strict version of a bearish Pin Bar. As with its bullish twin, the tell is a single long wick that stands out from the surrounding candles.

Bearish Engulfing

A Bearish Engulfing pattern reverses its bullish twin: a smaller bullish (green) candle followed by a larger bearish (red) candle whose body fully engulfs it. It appears at the top of an uptrend or at resistance, showing sellers overwhelmed buyers in a single period.

Example: on XAU/USD H1 after a run-up, a small green candle prints, then the next candle opens near that green candle’s close and sells off hard, closing below its open — its red body fully swallowing the prior green body. That is a Bearish Engulfing at resistance.

Evening Star

An Evening Star is the Morning Star flipped: a long bullish candle, a small-bodied star that stalls, then a long bearish candle closing deep into the first candle’s body. It marks a three-candle top reversal where buying momentum stalled and sellers took control.

Continuation and indecision patterns

Not every pattern reverses a trend. Some mark strong conviction in the current direction; others mark a pause where neither side wins. These are the shapes you read between the reversals.

Marubozu

A Marubozu is a single candle with a full body and little or no wick on either end — the open and close sit at or right up against the high and low. A bullish Marubozu (opens at the low, closes at the high) shows buyers controlled the entire period; a bearish Marubozu shows sellers did.

It signals strong conviction and often appears mid-trend as a continuation cue: the side in control is still firmly in control. A bullish Marubozu inside an uptrend says the buyers have not tired.

Doji

A Doji is a candle where the open and close are almost exactly equal, leaving a tiny or non-existent body with wicks on one or both sides. It looks like a cross or a plus sign. It means neither buyers nor sellers won — the market is undecided.

A Doji on its own is not a signal; it is a pause. Its meaning comes from what surrounds it. A Doji after a long uptrend, at resistance, warns momentum is fading. The same Doji in the middle of a quiet range means nothing.

Common Doji variants worth knowing:

• Dragonfly Doji — long lower wick, with open, close, and high all near the top. A bullish rejection of lower prices, like a Hammer’s cousin.
• Gravestone Doji — long upper wick, with open, close, and low all near the bottom. A bearish rejection of higher prices.
• Long-legged Doji — long wicks both ways. Maximum indecision; a coin-flip candle.

The practical rule: treat a Doji as a warning to wait for the next candle, not as an entry. The candle after the Doji usually tells you which side finally won.

Spinning Top

A Spinning Top is a small body with upper and lower wicks of roughly equal length. Like the Doji, it signals indecision — but with a real (if small) body, so one side edged ahead. It carries the same message: the current push is losing steam, wait for the next candle to confirm direction.

Most reliable patterns and how to confirm

Traders always ask which candlestick pattern is “most reliable.” The honest answer: reliability is not a property of the shape alone — it is a property of the shape plus its context. The same Hammer is a high-quality signal at a support level and noise in open space.

That said, some patterns tend to be more dependable than others because they show a fuller shift in control:

• Multi-candle patterns beat single candles. The Engulfing pattern and the three-candle Morning/Evening Star show a more complete handover of control than a lone Hammer or Doji.
• Bigger, cleaner shapes beat marginal ones. A large engulfing candle that dwarfs the one it swallows is stronger than one that barely clears it.

Three filters turn any pattern from a shape into a trustworthy read:

1. Trend context. A reversal pattern only matters at the end of a move — a Hammer at the bottom of a downtrend, a Shooting Star at the top of an uptrend. Mid-trend, the same shapes mean little.
2. Level context. A pattern that forms at a marked support/resistance zone, trendline, or Fibonacci level is far stronger than one floating in the middle of nowhere. Mark your levels first, then look for candles at them.
3. Confirmation. Wait for the next candle to agree — a bullish close after a Bullish Engulfing, a bearish close after a Shooting Star — before you treat the pattern as valid.

On XAU/USD (gold), apply these filters more strictly. Gold’s long, frequent wicks print Hammer- and Doji-like shapes constantly, many of them meaningless. On gold, demand a level and confirmation before trusting a single-candle pattern.

Get a candlestick pattern indicator

Scanning dozens of charts by eye for a single Doji is slow and easy to get wrong. A candlestick pattern indicator labels the shapes on your chart automatically, so you spend your time judging context rather than spotting shapes.

For MetaTrader 5, the free Japanese candlestick patterns indicator labels Hammers, Engulfing patterns, Dojis, and Stars directly on the price bars. There is an equivalent Forex Candlestick Patterns MT4 Indicator for MT4 users.

One honest caveat: an indicator finds the shape, not the setup. It will flag every Hammer, including the ones in open space that you should ignore. Use it as a first filter that saves your eyes, then apply the trend-level-confirmation check above before acting on anything it marks. Candlestick patterns are one piece of a wider toolkit — see how they fit alongside oscillators and moving averages in our guide to using indicators for forex analysis.

Frequently asked questions

What are forex candlestick patterns?

Forex candlestick patterns are shapes that one to three candles form on a price chart, each hinting at a possible reversal, continuation, or indecision. They read the balance between buyers and sellers through the body (open-to-close) and the wicks (rejected highs and lows). Common ones include the Doji, Hammer, Pin Bar, Engulfing pattern, and Morning/Evening Star.

What’s the difference between a bullish and a bearish candlestick pattern?

A bullish pattern points to buyers taking control and forms after a downtrend or at support — for example a Hammer, a Bullish Engulfing, or a Morning Star. A bearish pattern points to sellers taking over and forms after an uptrend or at resistance — a Shooting Star, a Bearish Engulfing, or an Evening Star. Many are exact mirror images of each other.

What is a Doji and what does it mean?

A Doji is a candle where the open and close are almost equal, leaving a tiny body and a cross-like shape. It means neither buyers nor sellers won — the market is undecided. On its own it is a pause, not a signal. Its meaning depends on context: a Doji at resistance after an uptrend warns momentum is fading.

What is a Pin Bar and how is it different from a Hammer?

A Pin Bar is a candle with a small body and one long wick that sticks out from surrounding price, showing that side’s move was rejected. A Hammer is a stricter kind of Pin Bar: small body, long lower wick, at the bottom of a downtrend. Every Hammer is a bullish Pin Bar, but a Pin Bar can appear anywhere and point either way.

What is an engulfing pattern?

An Engulfing pattern is two candles where the second candle’s body fully covers the first candle’s body. A Bullish Engulfing is a small red candle followed by a large green one at a bottom; a Bearish Engulfing is a small green candle followed by a large red one at a top. It signals a sharp swing in control from one side to the other.

What is the most reliable candlestick pattern?

No single pattern is “most reliable” in isolation — reliability comes from context. That said, the Engulfing pattern and the three-candle Morning/Evening Star tend to be more dependable than single candles, because they show a fuller shift in control. Any pattern’s reliability rises sharply when it forms at support/resistance with confirmation from the next candle.

How do you read a candlestick?

Read it in three steps: check the body (long or short — how decisive the period was), the wicks (a long wick marks a rejection on that side), and the location (top of an uptrend, bottom of a downtrend, at a level, or mid-range). Location is decisive — the same shape means different things depending on where it forms.

Do candlestick patterns work in forex?

Yes, but as probabilities, not guarantees. Candlestick patterns describe shifts in buyer/seller control that often precede moves, but they fail regularly when read alone. They work best as one input alongside trend, support/resistance, and confirmation. On volatile instruments like gold, they throw more false signals, so demand extra confirmation.

What is the best timeframe for candlestick patterns?

H1 and H4 are the best starting point for most traders — high enough to filter spread noise, low enough to give regular patterns. D1 patterns carry the most weight but appear slowly. Avoid M1 and M5 while learning: spread and noise print constant false patterns that teach the wrong lessons.

Candlestick patterns are a language for reading who controlled each period — buyers, sellers, or neither. Learn the anatomy of a single candle first, then the handful of reversal, continuation, and indecision patterns that actually matter: Hammer and Shooting Star, Engulfing, Morning and Evening Star, Marubozu, and the Doji family. But the shapes only pay off when you read them at levels, wait for confirmation, and account for the instrument — gold’s wicks will fool you more than EUR/USD’s. Once you can name the patterns cold, move on to how to trade candlestick patterns for the entry, stop, and sizing rules.

Forex and CFD trading carries a high level of risk and may not be suitable for all traders. The strategies and indicators described in this article are educational. Past performance does not guarantee future results. Always test on a demo account before risking real capital.