8 Strongest Candlestick Patterns
The most reliable Japanese Candlestick chart patterns — three bullish and five bearish patterns — are rated as STRONG. Strong candlestick patterns are at least 3 times as likely to resolve in the indicated direction (greater than or equal to 75% probability).
Bullish Candlestick Patterns
Three White Soldiers
Strong bullish reversal in a downtrend
Three rising tall green candles, with partial overlap and each close near the high.
Deliberation
Strong bullish continuation in an uptrend
Two rising tall green candles, with partial overlap and each close near the high, followed by a small green candle that opens near the preceding close.
Morning Star
Strong bullish reversal in a downtrend
Tall red candle followed by a lower small candle, either green or red, with a gap between the two bodies. Then a gap up leads to a third, tall green candle that closes above mid-point on the body of the first candle.
Bearish Candlestick Patterns
Three Black Crows
Strong bearish reversal in an uptrend
Three falling tall red candles, with partial overlap (between the candlestick bodies) and each close near the low.
Identical Three Crows
Strong bearish reversal in an uptrend
Three identical falling red candles with no overlap (between the bodies) and each close near the low.
Evening Star
Strong bearish reversal in an uptrend
Tall green candle followed by a higher small candle, either filled or unfilled, with a gap between the two bodies. Then a gap down leads to a third, tall red candle that closes below mid-point on the body of the first candle.
Concealing Baby Swallow
Strong bearish continuation in a downtrend
This rare pattern consists four red candles. Two consecutive tall red candles with no shadows gap down to a third tall red candle with a tall upper shadow (that overlaps the preceding body) and no lower shadow. This is followed by a fourth red candle which completely engulfs the previous candle (including the shadow).
Three Line Strike
Strong bearish reversal in an uptrend
Three rising green candles, with higher closes, followed by a tall red candle that opens above (or equal to) the preceding close and closes below the bodies of the preceding three candles.
Author: Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He co-founded Incredible Charts and writes the popular Trading Diary and Patient Investor newsletters.
Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.
Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.
He founded PVT Capital (AFSL No. 546090) in May 2023, which offers investment strategy and advice to wholesale clients.