Graham Neary of FuturesTechs.com outlines this set of important candlestick patterns and what they mean for the market.

1. Bullish Marabuzo
Number of candles: 1
Description: long green candle which opens near its low, and closes near its high.
Implications: Bullish


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2. Bearish Marabuzo
Number of candles: 1
Description: long red candle which opens near its high, and closes near its low
Implications: Bearish

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3. Doji
Number of candles: 1
Description: candle which closes near where it opened
Implications: Reversal

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4. Shooting Star
Number of candles: 1
Description: candle which closes near where it opened, at the bottom of the period's range
Implications: Bearish Reversal (in an uptrend)

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5. Hammer
Number of candles: 1
Description: candle which closes near where it opened, at the top of the period's range
Implications: Bullish Reversal (in a downtrend)

6. Hanging Man
Number of candles: 1
Description: candle which closes near where it opened, at the top of the period's range
Implications: Bearish Reversal (in an uptrend) (only weak effectiveness)

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7. Inverted Hammer
Number of candles: 1
Description: candle which closes near where it opened, at the bottom of the period's range
Implications: Bullish Reversal (in a downtrend) (only weak effectiveness)

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NEXT PAGE: 7 More Tradable Patterns

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8. Bullish Engulfing Pattern
Number of candles: 2
Description: green candle with a lower open and a higher close than the previous candle
Implications: Bullish Reversal (in a downtrend)

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9. Bearish Engulfing Pattern
Number of candles: 2
Description: red candle with a higher open and a lower close than the previous candle
Implications: Bearish Reversal (in an uptrend)

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10. Harami
Number of candles: 2
Description: candle with a real body contained within the range of the prior real body (which must have moved in the direction of the prior trend)
Implications: Reversal (only weak effectiveness)

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11. Dark Cloud Cover
Number of candles: 2
Description: red candle with a higher open than the previous candle, but a close in the bottom half of that prior candle
Implications: Bearish Reversal (in an uptrend)

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12. Piercing Pattern
Number of candles: 2
Description: green candle with a lower open than the previous candle, but a close in the top half of that prior candle
Implications: Bullish Reversal (in a downtrend)

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13. Morning Star
Number of candles: 3
Description: long red candle followed by a small-bodied candle which gaps lower. The third candle closes in the top half of the first candle
Implications: Bullish Reversal (in a downtrend)

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14. Evening Star
Number of candles: 3
Description: long green candle followed by a small-bodied candle which gaps higher. The third candle closes in the bottom half of the first candle
Implications: Bearish Reversal (in a downtrend)

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Graham Neary, MSTA, of FuturesTechs.com