In short
Pin bar
A long wick against the move — price refused to go further.
Engulfing
The second candle fully covers the first one's body — a sharp change of control.
Harami
A small candle inside the previous candle's body — a pause and indecision.
The main rule
A pattern is a trigger at a level, not a standalone signal.
Six patterns
- Bullish pin bar. A long lower wick and a small body at the top. After reacting at a level, buyers pushed price back — a rise is likely.
- Bearish pin bar. A long upper wick. Sellers rejected the attempt to rally — a decline is likely.
- Bullish engulfing. A green candle fully covers the previous red candle's body: buyers took control and improved the odds of a rise.
- Bearish engulfing. A red candle covers a green one: sellers took over.
- Harami. A small candle inside a large one. The move has stalled and the market paused — the break of its boundaries shows the next step.
- Doji. The open and close almost match. The sides are balanced, there's indecision — often before a reversal at a level.
What they show
Candlestick patterns essentially describe the same thing: how price reacted at an important place. A double bottom on a lower timeframe often looks like a bullish engulfing candle on a higher one; a false breakout looks like a pin bar. So what matters isn't the pattern's name but where it appeared.
How to trade them
01
Level first
Support, resistance, a trendline, a supply or demand zone.
02
Then the pattern
A pin bar, engulfing candle or harami right at that level.
03
Wait for the candle to close
Before the close a pin bar can easily turn into an ordinary candle.
04
Enter beyond the pattern's extreme
A break of a bullish pattern's high or a bearish pattern's low.
05
Stop beyond the wick
Beyond the tip of the pin bar's wick or the engulfing candle's low.
No pattern works every time. Even a perfect pin bar at a perfect level sometimes fails — that's a normal part of probability. Losing trades aren't a failure; they're part of any system.
Common mistakes
Trading a pattern in the middle of a move
Without a level a pin bar is just a candle with a wick.
Entering before the candle closes
A candle's shape is only final at the close.
Learning dozens of exotic patterns
The six main ones are enough. The rest are variations with fancy names.