Candlestick pattern
Also called: candlestick formation, doji, hammer, shooting star, engulfing pattern, morning star, evening star, harami
A named shape of one to three candles, such as a doji, hammer or engulfing pattern, describing how a session or sessions unfolded.
Each formation describes something real, such as lower prices being rejected within a session. Their traditional names promise reversals, but tests on large samples generally find weak predictive power on their own, especially after costs. Treat them as observations to test.
Learn more in these lessons
- Candlestick formationsDo candlestick patterns predict price reversals?
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