Personal Finance. Your Practice. Popular Courses. Table of Contents Expand. Table of Contents. Candlestick Pattern Reliability. Candlestick Performance. Three Line Strike. Two Black Gapping. Three Black Crows. Evening Star. Abandoned Baby. Candlestick Pattern FAQs. The Bottom Line. Trading Technical Analysis. Part of. Guide to Technical Analysis. Part Of. Key Technical Analysis Concepts.
Getting Started with Technical Analysis. Essential Technical Analysis Strategies. Technical Analysis Patterns. Technical Analysis Indicators. Key Takeaways Candlestick patterns, which are technical trading tools, have been used for centuries to predict price direction. There are various candlestick patterns used to determine price direction and momentum, including three line strike, two black gapping, three black crows, evening star, and abandoned baby.
Many signals emitted by these candlestick patterns might not work reliably in the modern electronic environment. Traders supplement candlestick patterns with additional indicators. Candlesticks are based on current and past price movements and are not future indicators. How Accurate Is Candlestick Trading? How Do You Read Candlesticks? Article Sources. Investopedia requires writers to use primary sources to support their work.
These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy. Compare Accounts. The offers that appear in this table are from partnerships from which Investopedia receives compensation.
This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace. Related Articles. Technical Analysis Understanding a Candlestick Chart. Partner Links. Related Terms. Stick Sandwich Definition A stick sandwich is a technical trading pattern in which three candlesticks form what appears to be a sandwich on a trader's screen. White Candlestick Definition A white candlestick depicts a period where the security's price has closed at a higher level than where it had opened.
Understanding a Dragonfly Doji Candlestick A dragonfly doji is a candlestick pattern that signals a possible price reversal. The candle is composed of a long lower shadow and an open, high, and close price that equal each other. Three White Soldiers Three white soldiers is a bullish candlestick pattern that is used to predict the reversal of a downtrend. What Is a Morning Star? A morning star is a bullish candlestick pattern in a price chart. It consists of three candles and is generally seen as a sign of a potential recovery following a downtrend.
They show current momentum is slowing and the price direction is changing. Investopedia is part of the Dotdash Meredith publishing family. Nikkei CFD. Shanghai SE. UK CFD. Hong Kong CFD. Nifty US-Dollar Index. Open An Account with Plus your capital is at risk. Top Gainers Name. Petropavlovsk P Detsky mir. Centrlnyi Teleg TGK-2 pref. HSCI ao. Top Losers Name. ADR HeadHunter GDR Globaltrans Enel Russia. MRSK Urala ao. Saratovskiy NPZ Cisco Systems, Get NetDania Mobile.
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