Single Candlestick Patterns

In one line: One candle can hint at the mood of buyers and sellers, but only the context around it tells you if the hint is worth trusting.

🎯 What you'll learn

• What the main single-candle shapes look like.
• What each shape says about buyers and sellers.
• Why the same shape can mean different things in different places.
• How to read a candle with its context (trend, location, volume).

📘 Key concepts

Strong candles: Marubozu

A candle that shows one side is fully in control.

• Marubozu (candle with a big body and almost no wick — the thin line above or below the body).
• A big green body with no wick = buyers pushed all day, no pullback. Strong bullish (price likely rising) momentum.
• A big red body with no wick = sellers pushed all day. Strong bearish (price likely falling) momentum.
• Think of a cricket team that scored freely all over — total control.

Indecision candles: Doji and Spinning Top

These candles show a tug-of-war with no winner.

• Doji — open and close are almost equal, so the body is tiny (looks like a plus sign). Buyers and sellers ended level.
• Spinning top — small body with wicks on both sides. Both sides tried, both failed.
• Meaning: the crowd is unsure. After a long move, this can warn of a reversal (trend turning the other way).

Rejection candles: Hammer, Hanging Man, Shooting Star

The shape is the same, but where it appears changes the message.

• Hammer — small body at the top, long lower wick. Price fell, then buyers pushed it back up. It shows buyers rejected (refused) lower prices.
  • Bullish only when it appears after a downtrend, near support (a price level where buyers often step in).
• Hanging man — same shape, but after an uptrend. A warning that selling may be starting.
• Shooting star / inverted hammer — long upper wick, small body at the bottom. Sellers rejected higher prices. A shooting star after an uptrend warns of falling prices.

The most important rule: context

• A candle alone means very little.
• Always read it with three things:
  • Trend — which way was price moving before?
  • Location — is it at support or resistance (a level where sellers often step in)?
  • Volume (how many shares traded) — a big candle on big volume matters more.
• One candle is a clue, not a promise.

🔍 Example

Imagine a stock falls for many days from ₹120 down to ₹100. At ₹100, buyers stepped in before at this same level, so ₹100 is a support level.

 |        <- long lower wick (price dipped, then came back)
[=]       <- small body near the top

• Today a hammer forms right at ₹100.
• The long lower wick shows sellers pushed to ₹96, but buyers pushed it back to ₹100.
• Because it is after a downtrend AND at support, it suggests buyers may be stepping in.
• This is a clue to watch — not a signal to bet your whole account.

⚠️ Common mistakes

• Trading a candle with no context — a hammer in the middle of nowhere means little.
• Confusing hammer and hanging man; they look the same, only the trend before them differs.
• Thinking a doji always means reversal — sometimes the crowd just pauses, then continues.
• Ignoring volume; a strong-looking candle on tiny volume is weak.
• Acting on one candle with no plan for loss (no stop-loss — an order that exits if price goes against you).

✅ Key takeaways

• Marubozu = strong one-sided momentum.
• Doji and spinning top = indecision, possible turn.
• Hammer / hanging man / shooting star = one side rejected a price.
• The same shape means different things in different places.
• Always read a candle with trend, location, and volume.

📝 Quick check

1. Q: What does a doji tell you? A: That buyers and sellers ended almost level — indecision, which can warn of a possible reversal.
2. Q: A hammer and a hanging man look identical. What makes them different? A: The trend before them — a hammer follows a downtrend (bullish clue), a hanging man follows an uptrend (bearish warning).
3. Q: Why should you never trade a single candle on its own? A: Because one candle is only a clue; you must check the trend, the location (support/resistance), and volume first.

📖 New words

• Marubozu — a candle with a big body and little or no wick, showing strong one-sided momentum.
• Doji — a candle where open and close are almost equal, showing indecision.
• Spinning top — a small body with wicks on both sides, showing indecision.
• Hammer — small body at top with a long lower wick; buyers rejected lower prices.
• Hanging man — hammer shape after an uptrend; a bearish warning.
• Shooting star — long upper wick after an uptrend; sellers rejected higher prices.
• Reversal — when a trend turns and starts moving the other way.
• Support — a price level where buyers often step in.
• Resistance — a price level where sellers often step in.
• Volume — how many shares traded in a period.
• Stop-loss — an order that exits your trade if price moves against you.

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Educational content only — not financial advice. Trading involves the risk of losing money.