A candlestick compresses four pieces of information into one visual: the open, high, low, and close of a period. The body (thick part) shows the distance between open and close. The wicks (thin lines) show the extremes reached. A green/white candle closed higher than it opened; a red/black candle closed lower.
Single-Candle Patterns
Doji
A doji has open = close (or nearly). The body is a thin line. It signals indecision — neither buyers nor sellers won. After a trend, a doji often precedes a reversal. But in a range, dojis are meaningless.
Hammer & Hanging Man
A hammer has a small body at the top and a long lower wick (at least 2× the body). It shows sellers pushed price down, but buyers overwhelmed them by close. In a downtrend, a hammer is a bullish reversal signal. The same shape in an uptrend is a "hanging man" — bearish.
Shooting Star
The mirror of a hammer: small body at the bottom, long upper wick. Buyers pushed up, sellers slammed it back down. In an uptrend, this is a bearish reversal signal.
Two-Candle Patterns
Bullish/Bearish Engulfing
An engulfing pattern is the strongest reversal signal. The second candle's body completely covers the first candle's body (open beyond the prior close, close beyond the prior open). It shows a sudden shift in control from one side to the other.
An engulfing pattern at a major support or resistance level is one of the highest-probability setups in trading. CURIO's pattern engine auto-detects these and flags them in the AI analysis.
Three-Candle Patterns
Morning Star / Evening Star
A three-candle reversal. Morning star (bullish): big bearish candle → small indecision candle (gap down) → big bullish candle closing above the midpoint of the first. Evening star is the mirror. These are powerful but rare — when they form at a key level, they're high-conviction trades.
Rules for Trading Patterns
- ▸Always trade patterns in context — a hammer in a downtrend is a signal; a hammer in a range is noise.
- ▸Patterns at key S&R levels are far more reliable than patterns in the middle of a range.
- ▸Wait for the candle to close — a pattern that looks like an engulfing mid-candle can disappear.
- ▸Use them as entry triggers, not as standalone reasons to trade.