Japanese candlestick patterns
Patterns
What it is
Graphical configurations formed by 1 to 5 consecutive candles — engulfings, doji, hammers, stars, three white soldiers, etc. Each pattern carries a statistical bullish, bearish, or indecision bias depending on the trend context it appears in.
How to read it
A bullish pattern after a drop (e.g., hammer, bullish engulfing) suggests a possible bounce. A bearish pattern after a rally (e.g., evening star, bearish engulfing) suggests possible exhaustion. Indecision patterns (doji, spinning top) signal temporary balance between buyers and sellers.
Common reference points
- Bullish pattern — positive bias↑ Hammer, engulfing, soldiers...
- Indecision — fragile balance◇ Doji, spinning top...
- Bearish pattern — negative bias↓ Star, bearish engulfing...
Orders of magnitude, not a rule: the same number does not mean the same thing from one sector to the next.
What it does not tell you
The statistical edge of candlestick patterns is modest and inconsistent according to studies. Use as a thought-trigger ("what could explain this signal?"), never as a standalone buy/sell signal.
Other measures — Polaris score
Educational content. Polaris is not a registered investment adviser and makes no recommendation.