You have to learn to read the charts if you wish to trade forex like a professional. One of the most powerful tools traders use is candlestick patterns. These simple forex candle patterns can tell you when prices might rise or fall. By recognizing these shapes on a chart, you can make better decisions and avoid risky trades.
In this tutorial, we'll present the list of 20 of the most powerful candlestick patterns forex traders in 2025. These patterns can allow you to trade more confidently, especially if you are new to forex or want to sharpen your skills.
1. What Is A Candlestick?
What is candle stick pattern in technical analysis? A candlestick is a simple way to show the price movement of a currency pair on a chart. Each candlestick shows 4 important things: the opening price, closing price, highest price, and lowest price during a certain period. That time could be 1 minute, 15 minutes, or one day — it depends on the chart you’re looking at.
Candlesticks comprise a body and 2 lines known as wicks or shadows. The body shows the price at which the price opened and closed. The candle is typically green or white when the price rises. Black and red candlestick meaning a declining price. By looking at a candlestick chart, traders can guess what will happen next in the market.
2. 20 Candlestick Patterns Forex Traders Need To Learn
There are 20 powerful kinds of candlestick patterns forex traders need to learn. They are divided into 4 main groups: bullish reversals, bearish reversals, continuation & indecision patterns. Learning how to read candlestick patterns is also the winning mindset that traders need to make smarter trading decisions.[1]
2.1. Bullish Reversal Candlestick Patterns
Bullish reversal candle patterns are signs that a downtrend might be coming to an end and an uptrend could be starting. Let’s break down the most important bullish trading patterns you’ll want to watch for on your candle bar chart.
1. Hammer
The Hammer is one of the easiest and best candlestick patterns forex to recognize. It follows a price fall and has a small body at the top and a long lower shadow. This is a sign that sellers tried to push prices lower but buyers jumped in and regained them at the close. It is stronger when it happens at the end of a prolonged downtrend or by a significant support level. The hammer shows about 62% success in predicting bullish reversals.
2. Inverted Hammer
This bullish pattern stock has a long upper wick and a little body at the bottom, just like an upside-down hammer. This pattern shows that buyers tried to push prices higher but sellers pulled it back before the candle closed.
The success ratio of this single-candle pattern is approximately 65%. In a candlestick graph, traders often wait for the next candle to confirm the reversal before placing a trade.
3. Bullish Engulfing
The Bullish Engulfing is one of the strong bullish candlestick patterns that can signal a dramatic reversal in market direction. It takes place when a small bearish candlestick is followed by a large bullish one that completely engulfs the one before it.
On candlestick formations, a Bullish Engulfing shows up that the buyers are taking control. You can expect around a 65% success rate as the prices will increase.
4. Piercing Line
Piercing Line is a two-candle pattern. It begins with a long bear candle and then a bullish candle which opens lower but closes more than halfway into the previous candle’s body.
Smart traders hold out for further verification, like a higher close on the next candle or a bounce off a support price. 60% is the success rate that you can expect when a Piercing Line happens.
5. Morning Star
The Morning Star is a strong three candlestick pattern. One big bearish candle, then a small-bodied candle (bullish or bearish), finishes with a strong bullish one. The pattern indicates a turning point in the market and shows sellers losing strength and buyers taking over. You can use RSI (Relative Strength Indicator) to predict whether a Morning Star is creating. The Morning Star has a success rate of about 65% for predicting bullish trends.
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6. Three Outside Up
The Three Outside Up is a 3 candle pattern and expresses strong buying pressure. The first is a bearish candle. The second is a strong bullish candlestick that engulfs the first one. The third one is again a bullish candle, which closes above the second candle.
Among all the candlestick patterns forex, this one is valued for its reliability, especially if it comes after a long downtrend. The success rate is around 70%, making it the strongest bullish candlestick pattern.
7. Three Inside Up
The Three Inside Up is another three-candle bullish reversal pattern. A big bear candle appears first, followed by a small bull candle. The third is a strong bullish candle that marks the trend change. These bullish candlestick formations show that the selling pressure is down and the buyers are in control. 64% is the success rate that you can achieve when looking at the Three Inside Up pattern.
Below is the summary table of 7 Bullish Reversal Candlestick Patterns:
| NO | CANDLE PATTERN | SUCCESS RATE | KEY FEATURES |
| 1 | Hammer | 62% | Small body, long lower shadow, shows market bounce. |
| 2 | Inverted Hammer | 65% | Small body, long upper shadow, indicates trend reversal. |
| 3 | Bullish Engulfing | 65% | A large bullish candle fully covers the prior bearish candle. |
| 4 | Piercing Line | 60% | A bullish candle that opens low and closes higher than the midpoint of the bearish candle. |
| 5 | Morning Star | 65% | 3 candlestick patterns show the change from selling to buying. |
| 6 | Three Outside Up | 70% | Bearish candle, followed by a larger bullish engulfing candle, followed by another bullish one. |
| 7 | Three Inside Up | 64% | A bullish candle contained within a prior bearish one, followed by another bullish one. |
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You can click on the link right below to download your free Bullish Forex candlestick patterns cheat sheet.
Link download: 7 Essential Bullish Candlestick Patterns PDF
2.2. Bearish Reversal Candlestick Patterns
Bearish reversal candlestick patterns signal that an upward trend can be ending, and prices can start to fall. The identification of these candlestick patterns forex helps traders decide when to sell or not to buy. They are major tools in bearish pattern trading and are most commonly observed in stock candlestick patterns.
1. Bearish Engulfing
The Bearish Engulfing is a two-candle pattern. The second is a big bear that engulfs the first small bull. It signals that sellers have overcome buyers, signaling the potential for a price fall. That is why Bearish Engulfing plays an important role in bearish candlestick patterns with volume. With a success rate of around 72%, it's your turn to sell out.
2. Evening Star
Evening Star starts with a large bullish candle, followed by a small-bodied candle, and ends with a bearish candle that closes below the midpoint of the first. Understanding bullish vs bearish candles is crucial here, as the pattern marks the transition from an uptrend to a downtrend. Evening Star has a success rate of 69% in a study conducted and published in the "Journal of Technical Analysis".
3. Hanging Man
The Hanging Man looks like a hammer but appears after an uptrend. It has a small upper body with a long wick below. It shows that selling pressure is increasing, although the price may close higher. It is a classic example of bearish candles bringing potential trend change, with a success rate of 59%.
4. Shooting Star
Shooting Star is a one-candlestick formation with a small or no body and a long upper wick, forming after an uptrend. It reflects the fact that the buyers pushed prices up, but the sellers intervened and dragged the price back down before the close. The pattern is one of the typical stock candle patterns. Shooting Star may lead to a 59% success rate in predicting bearish price reversals.
5. Three Outside Down
It is a 3-candle pattern: a bullish candle, a bearish candle that engulfs the first one, and a third bearish candle closing lower. It is a sign of strong buying-to-selling pressure reversal. As one of the bearish candlestick patterns forex, it provides a nice signal to traders to sell. You stand a 67% chance of success when you see a Three Outside Down.
6. Three Inside Down
The Three Inside Down pattern starts with a big bull candle, then a small bear candle in the first, and a second bear candle closing below the first. This sequence is an uptrend that is ending and a downtrend in progress, and it has a success rate of 64%. The bear candles show that the buyers are weakening and the sellers are gaining strength.
7. Three Black Crows
The Three Black Crows pattern includes 3 consecutive long bearish candles with each lower close than the previous one. It signals intense pressure to sell and a potential reversal from an uptrend. It's often contrasted with the strongest bullish candlestick pattern, the Three White Soldiers. Such the best candlestick offers a 78% success ratio in predicting the bearish turns.
Below is the summary table of 7 Bearish Reversal Candlestick Patterns:
| NO | CANDLE PATTERN | SUCCESS RATE | KEY FEATURES |
| 1 | Bearish Engulfing | 72% | A large bearish candle swamps over a small bullish one, signaling strong selling pressure. |
| 2 | Evening Star | 69% | 3-candle pattern: big bullish, little neutral, followed by strong bearish candle reversing an uptrend. |
| 3 | Hanging Man | 59% | A single candle with a small top body and long lower shadow after an uptrend, a reversal warning. |
| 4 | Shooting Star | 59% | Small body with extended upper shadow after a rise; buyers lose control, & sellers push price lower. |
| 5 | Three Outside Down | 67% | 3-candle pattern: bullish candle, bearish engulfing candle, followed by still another lower-closing bearish candle. |
| 6 | Three Inside Down | 64% | Big bullish candle, a small bearish candle within it, & another bearish candle that closes lower. |
| 7 | Three Black Crows | 78% | 3 long bearish candles in a row, each of which closes lower, indicating strong downtrend strength. |
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Click on the link below to download the Bearish candle chart patterns PDF for free.
Link download: 7 Essential Bearish Candlestick Chart Cheat Sheet
2.3. Continuation Candlestick Patterns
Not all trading candlestick patterns forex signal a reversal in the market. Whether you're spotting a green candle stock in an uptrend or a uniform decline during a downtrend, these candlestick indicators can get you on the right side.
1. Rising Three Methods
Rising Three occurs in an uptrend and signals that bulls are still in charge. The pattern begins with a tall green candle. 2 or more small bears follow the first one and move slightly lower. The last powerful bullish candle will break above the first candle's height. This pattern indicates that buyers are taking back power. You can predict the bullish continuations with a 74% success rate.
2. Falling Three Methods
In contrast to Rising Three, this pattern occurs in a downtrend. It begins with a long bearish candle, followed by a pair of small bullish or neutral candles, and finishes with another strong bearish candle that closes below the first.
Traders typically combine this with tail arrows candlestick pattern signals to find high-probability setups. Falling Three offers approximately a 72% chance of success in bearish continuations.
3. Three White Soldiers
The Three White Soldiers pattern usually emerges after a downtrend or pause. This pattern has 3 consecutive bullish candles, each opening within the previous body and closing near the highs. The steady climb demonstrates growing buying pressure. It is a top recommendation among bottoming stock pattern candlestick structure sets. You can expect up to an 82% success ratio for subsequent bullish reversals.
Below is the summary table of 3 Continuation Candlestick Patterns:
| NO | CANDLE PATTERN | SUCCESS RATE | KEY FEATURES |
| 1 | Rising Three Methods | 74% | Strong bullish candle, 3+ small bearish candles, then a bullish breakout |
| 2 | Falling Three Methods | 72% | Big bearish candle, a few small bullish candles, then another bearish drop |
| 3 | Three White Soldiers | 82% | 3 long green candles in a row, each closing near its high |
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Link download: 3 Essential Contination Trading Candlestick Patterns Cheat Sheet
2.4. Indecision Candlestick Patterns
Indecision candlestick patterns forex indicate that there is uncertainty in the market, with neither buyers nor sellers leading. Doji candlestick types are great examples. They have small bodies and long wicks, symbolizing a balance between buying and selling pressure.
1. Bullish Spinning Top
This type of candlestick has a short body and often appears in an uptrend. Both the upper and lower wicks are relatively long, meaning the market was uncertain. The open and close are roughly the same price, meaning that neither the bulls nor the bears were strong enough to gain a clear advantage. You can achieve a 54% success ratio in predicting bullish trends.
2. Bearish Spinning Top
Similar to Bullish Spinning Top but in a downtrend. The bearish Spinning Top has a small body and longer wicks on both sides. It shows a short-term confrontation between the seller and buyer. If the subsequent candle is bearish and confirms the downtrend, this pattern suggests continuation. The success ratio is approximately 53% when a Bearish Spinning Top appears.
3. Doji
Doji is a unique candlestick where the opening and closing are nearly equal. Although most treat it as a reversal signal, in strong trends, a Doji may indicate a temporary pause before the next move. Traders usually watch the candle following a Doji and use a stochastic oscillator for confirmation.
Besides traditional Doji, you’ll also find Long-legged Doji, Gravestone Doji, Dragonfly Doji, and Four-price Doji in the chart. Doji gives approximately a 55% rate of success in reversal predictions.
Below is the summary table of 3 Indecision Candlestick Patterns:
| NO | CANDLE PATTERN | SUCCESS RATE | KEY FEATURES |
| 1 | Bullish Spinning Top | 54% | Small body, long wicks on both ends, forms in uptrend, signals trend pause |
| 2 | Bearish Spinning Top | 53% | Small body, long wicks on both ends, in a downtrend, suggests a possible continuation |
| 3 | Doji | 55% | Opening & closing prices are nearly the same, indicating market indecision |
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Click the link below to download the Indecision Trading Candlestick Patterns PDF for free.
Link download: 3 Essential Indecision Candle Chart Cheat Sheet
3. How To Read Candlestick Chart?
Each candlestick shows a price action over a set forex timeframes, like 1 minute, 5 minutes, 15 minutes, or 1 day. The candle body shows the opening and closing prices, while the wicks (or shadows) show the highs and lows. When the candle is green (or white), the price goes up. When it's red (or black), it goes down. Besides that, you should use momentum indicators and the psychology behind the candle chart to know if it is a strong or weak candlestick pattern.
4. FAQs
What Are The Most Reliable Candlestick Patterns?
Hammer, Bullish Engulfing, Bearish Engulfing, and Morning Star are some of the most reliable candlestick patterns forex. They often give strong signals about market direction changes.
4.1. Is The Black Candlestick Same As A Red Candlestick Pattern?
Yes — in most charts, a black candle shows the price ended the day below where it opened, just like a red candle. It shows selling pressure in the market.
4.2. What is the 3 Candle Rule In Trading?
The 3 Candle Rule suggests waiting for 3 consecutive candles in the same direction before affirming a trend. It prevents false signals and sharp reversals.
4.3. What is the 5-Min Candle Strategy?
The 5-Min Candle Strategy uses candlestick patterns on a 5-minute chart for quick trades, like Doji or Engulfing.
No matter if you are a long-term or short-term trader, learning how to understand candlestick chart will help boost your confidence. You should practice spotting candlestick patterns forex on demo accounts and always trade with a plan. Mastering stock candlestick charts is the perfect place to start if you want to start forex trading. Don’t forget to download our Free stock candlestick cheat sheet for convenient use.
5. About H2T Finance
At H2T Finance, we know that mastering technical analysis is crucial for making informed trading decisions. In this category Market Analysis, we provide clear explanations of chart patterns, indicators, and price action strategies that help you decode market movements. With the trusted expertise of H2T Media Group, we deliver real-time insights and expert analysis to empower you to track trends, uncover opportunities, and navigate today's fast-moving markets with greater precision.
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