Candlestick patterns: what each one means — and how often it actually worked
Over the last 150 days, an ordinary session for the stocks these candles fired on was followed by a higher close a week later 44.6% of the time. Measured against that, 15 of 28 directional candles moved price their way more often than an ordinary day — the strongest bullish one was the piercing line (50.1%, +5.5 pts) and the strongest bearish one the tweezer top (58.2% lower, +3.7 pts). Most edges are a few points, which is why we treat candles as confirmation, not a trade on their own.
Bullish candlestick patterns
Reversal and continuation candles that point up. The scanner only flags a bullish reversal after a decline — a hammer in the middle of a rally isn't a hammer — and a bullish continuation (rising three methods, mat hold) only after an advance. Ranked by how much more often price was higher a week later than on an ordinary day.
| Pattern | Signals | Higher in 1 wk | vs. any day | Avg 1 wk | Higher in 1 mo | vs. any day |
|---|---|---|---|---|---|---|
Piercing Line2 bars Opened below the prior low, then closed back above the midpoint of the prior down candle. Trading guide → | 1,150 | 50.1% | +5.5 pts | -0.1% | 44.0% | +1.6 pts |
Bullish Engulfing2 bars An up candle whose body covers the prior down candle's body — buyers overpowered sellers in one session. Trading guide → | 6,641 | 48.7% | +4.1 pts | -0.2% | 43.9% | +1.5 pts |
Three White Soldiers3 bars Three rising up candles, each opening inside the prior body and closing higher — steady buying. Trading guide → | 1,600 | 47.3% | +2.6 pts | +0.9% | 41.4% | -1.0 pts |
Bullish Marubozu1 bar A full-range up candle with almost no shadows — buyers in control from open to close. Trading guide → | 3,681 | 45.2% | +0.6 pts | -0.5% | 41.3% | -1.1 pts |
Bullish Kicker2 bars A strong up candle that opened above the prior strong down candle's open — no body overlap. | 365 | 45.2% | +0.6 pts | -0.1% | 47.5% | +5.1 pts |
Three Outside Up3 bars A down candle engulfed by an up candle, then a higher close — the engulfing confirmed. | 2,851 | 45.1% | +0.5 pts | -1.2% | 40.3% | -2.1 pts |
Tweezer Bottom2 bars A down then an up candle sharing a near-identical low — the low held twice. Trading guide → | 2,745 | 45.1% | +0.5 pts | -0.4% | 39.6% | -2.8 pts |
Bullish Harami2 bars A small up body inside the prior, larger down body — selling momentum stalled. | 6,817 | 44.8% | +0.2 pts | -0.1% | 41.7% | -0.7 pts |
Hammer1 bar After a decline: a small body at the top of the range and a long lower shadow — sellers pushed it down and failed. Trading guide → | 5,922 | 43.1% | -1.5 pts | -0.5% | 40.8% | -1.6 pts |
Bullish Belt Hold1 bar Opened at the low and closed strong — a long up body with no lower shadow. | 5,266 | 43.1% | -1.5 pts | -0.9% | 42.3% | -0.1 pts |
Morning Star3 bars A big down candle, a small-bodied star, then an up candle closing past the first one's midpoint — sellers losing grip. Trading guide → | 1,450 | 43.0% | -1.6 pts | -0.8% | 40.0% | -2.4 pts |
Three Inside Up3 bars A long down candle, a small up candle inside it, then a close above the first one's open. | 1,899 | 43.0% | -1.6 pts | -0.3% | 41.3% | -1.1 pts |
Dragonfly Doji1 bar Opened and closed at the top with a long lower shadow — demand stepped in off the lows. Trading guide → | 1,815 | 42.6% | -2.0 pts | -0.5% | 39.4% | -3.0 pts |
Inverted Hammer1 bar After a decline: a small body at the bottom of the range and a long upper shadow — buyers probed higher. | 6,892 | 41.5% | -3.1 pts | -0.8% | 40.8% | -1.6 pts |
Rising Three Methods5 bars A long up candle, three small bars inside its range, then a close above it — continuation. Trading guide → | — collecting data | — | — | — | — | — |
Mat Hold5 bars A long up candle, a gap up and a shallow hold in its upper half, then a close above its high. | — collecting data | — | — | — | — | — |
Bearish candlestick patterns
The mirror images: candles that point down — reversals flagged only after an advance, falling three methods only after a decline. Here “worked” means price was lower — measured against how often an ordinary session was followed by a lower close.
| Pattern | Signals | Lower in 1 wk | vs. any day | Avg 1 wk | Lower in 1 mo | vs. any day |
|---|---|---|---|---|---|---|
Tweezer Top2 bars An up then a down candle sharing a near-identical high — the high held twice. Trading guide → | 2,165 | 58.2% | +3.7 pts | -0.6% | 56.4% | -0.9 pts |
Hanging Man1 bar Hammer shape after an advance — a long lower shadow shows sellers stepping in. Trading guide → | 4,051 | 57.0% | +2.5 pts | -1.0% | 58.7% | +1.5 pts |
Bearish Harami2 bars A small down body inside the prior, larger up body — buying momentum stalled. | 5,277 | 56.0% | +1.4 pts | -1.2% | 56.9% | -0.3 pts |
Bearish Marubozu1 bar A full-range down candle with almost no shadows — sellers in control from open to close. Trading guide → | 4,036 | 55.6% | +1.1 pts | -1.1% | 60.9% | +3.7 pts |
Three Inside Down3 bars A long up candle, a small down candle inside it, then a close below the first one's open. | 1,910 | 55.0% | +0.4 pts | -1.0% | 57.2% | -0.0 pts |
Bearish Engulfing2 bars A down candle whose body covers the prior up candle's body — sellers overpowered buyers in one session. Trading guide → | 6,876 | 54.7% | +0.2 pts | -0.5% | 55.3% | -1.9 pts |
Dark Cloud Cover2 bars Opened above the prior high, then closed below the midpoint of the prior up candle. | 1,132 | 54.7% | +0.1 pts | -0.4% | 54.1% | -3.1 pts |
Shooting Star1 bar Small body at the bottom of the range with a long upper shadow after an advance — the rally was rejected. Trading guide → | 4,522 | 54.2% | -0.3 pts | -0.6% | 56.0% | -1.2 pts |
Bearish Belt Hold1 bar Opened at the high and closed weak — a long down body with no upper shadow. | 5,565 | 53.8% | -0.7 pts | -0.3% | 57.6% | +0.4 pts |
Three Black Crows3 bars Three falling down candles, each opening inside the prior body and closing lower — steady selling. Trading guide → | 2,411 | 52.6% | -1.9 pts | -0.2% | 55.5% | -1.7 pts |
Gravestone Doji1 bar Opened and closed at the bottom with a long upper shadow — supply capped the rally. | 1,526 | 52.4% | -2.1 pts | -0.5% | 57.3% | +0.1 pts |
Three Outside Down3 bars An up candle engulfed by a down candle, then a lower close — the engulfing confirmed. | 3,308 | 51.7% | -2.8 pts | -0.0% | 54.8% | -2.4 pts |
Bearish Kicker2 bars A strong down candle that opened below the prior strong up candle's open — no body overlap. | 356 | 50.6% | -4.0 pts | -0.2% | 53.5% | -3.7 pts |
Evening Star3 bars A big up candle, a small-bodied star, then a down candle closing past the first one's midpoint — buyers losing grip. Trading guide → | 1,058 | 49.0% | -5.5 pts | -0.4% | 52.8% | -4.4 pts |
Falling Three Methods5 bars A long down candle, three small bars inside its range, then a close below it — continuation. Trading guide → | — collecting data | — | — | — | — | — |
“Higher / lower in 1 wk / 1 mo” = the close 5 / 20 sessions after the signal day versus the signal-day close. “vs. any day” = that rate minus the same rate for every session of the same stocks over the same window, in percentage points. Patterns under 300 signals are listed last and flagged — their rates swing a lot. “Collecting data” = no measurable signals yet under the current detection rules.
Neutral (indecision) candles
These say the market paused, not which way it will go next, so they carry no direction to measure. The scanner detects them but doesn't post them as candle signals; they matter as context — a doji or inside bar at the apex of a triangle is the coil before the move.
Open and close nearly equal — indecision.
Open and close nearly equal with long shadows both ways — maximum indecision.
A small body with shadows on both sides — indecision.
The whole range sat inside the prior bar's range — compression.
The range took out both the prior bar's high and low — expansion.
How to read a candle without fooling yourself
Trend first
A reversal candle needs something to reverse. A hammer after a three-week slide is a hammer; the same shape mid-rally is a hanging man or just noise. Our scanner won't flag a bullish reversal unless the prior trend was down.
Location beats shape
The same engulfing candle means more at support, at a prior breakout level or at the edge of a chart pattern than in the middle of a range. Ask where the candle formed before asking what it looks like.
Wait for the next bar
Most candles are a question; the following session is the answer. A higher close after a hammer, or a lower close after a shooting star, confirms the read — and gives you a level to put a stop behind.
Volume and the bigger picture
A reversal on heavy volume, in a stock that is already outperforming its sector, carries more weight than one on a quiet day in a laggard. Candles are the last word of a longer sentence.
On StockSetups
Candles as confirmation, scanned for you
- After every US close the scanner checks the last daily bar of ~12,300 stocks and ETFs for all 36 patterns above, with the prior-trend gate applied.
- The Daily Candlesticks board lists every bullish and bearish match — the free plan shows one example of each candle type with the full dossier; Pro shows them all.
- On the main board, a candle on a chart-pattern setup is shown as bullish, bearish or neutral confirmation — the way the numbers above say candles are best used.
Method
- Signals: every bullish or bearish candle the nightly scan posted on its own (not as part of a chart-pattern setup) in the last 150 days, on stocks averaging at least 100,000 shares a day.
- Measure: the close 5 and 20 sessions after the signal day versus the signal-day close. A bullish candle “worked” if price was higher, a bearish one if it was lower.
- Yardstick: the same measure for every session of the same stocks over the same window, so a falling or rising market doesn't flatter or sink the candles.
- Rule changes: on Oct 20, 2026 the detector was corrected — continuation patterns (rising/falling three methods, mat hold) must now agree with the prior trend, and a doji with a bare end is a dragonfly or gravestone doji rather than a hammer or shooting star. Earlier signals are re-read under the current rules from the stored daily bar; earlier continuation and dragonfly/gravestone signals are excluded, so those patterns rebuild their record from that date.
- Limits: one 150-day market regime; fixed horizons with no stops, targets or costs; signals on the same stock can cluster; and stocks delisted since are missing. A base rate describes the average case, not your next trade.
Questions
What is the most reliable candlestick pattern?
In our data (US stocks, last 150 days, patterns with 300+ signals), the candles that beat an ordinary day by the widest margin one week later were the piercing line (+5.5 pts), the bullish engulfing (+4.1 pts), the tweezer top (+3.7 pts). "Beat" means moving price the candle's way more often than any session for the same stocks did. No candle is reliable on its own — the edges are small and shift with the market regime.
Is a hammer candle a buy signal?
Not by itself. After 5,922 hammers on US stocks in the last 150 days, price was higher a week later 43.1% of the time, versus 44.6% for an ordinary session of the same stocks. A hammer at support, under a chart-pattern breakout level or after a confirmed higher close is worth more than the candle alone.
Do candlestick patterns work?
As clues, yes; as stand-alone signals, barely. Most candles in the table move price their way only a few percentage points more often than an ordinary day (44.6% higher a week later over this window), and some do worse. They earn their keep as confirmation — a bullish candle at the right spot of a chart pattern, in a stock already showing strength.
How many candlestick patterns are there?
Dozens have names. Our scanner checks the last daily bar of ~12,300 US stocks and ETFs for 36 of them every night: 16 bullish, 15 bearish and 5 neutral (indecision) candles.
Is there a candlestick pattern scanner?
Yes. StockSetups flags these candles after every US close on the Daily Candlesticks board — the free plan shows one example of each candle type with the full dossier, Pro shows every match — and uses them to confirm chart-pattern setups on the main board.
Is this investment advice?
No. These are historical base rates measured from the signal-day close at fixed horizons, with no stops, targets or trading costs, over one market regime. Past results don't predict future returns.
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