TA Education 9｜How Do You Trade Candles? 5 Classic Patterns!
Hi, tigers! Let’s start this week’s lessons: Candlesticks Part 1
A Japanese Candlestick Chart is a technical tool used to visualize the price movement of an asset over a specific period. Unlike a simple line chart that tracks only the closing price, a candlestick provides a complete picture of market sentiment by displaying four data points: Open, High, Low, and Close (OHLC).
The Structure:
The Real Body: The wide, colored portion represents the range between the Open and Close. It reveals the "winner" of the session (Buyers vs. Sellers).
The Shadows (Wicks): The thin lines extending above and below the body represent the High and Low extremes reached during the session. They reveal the "failed attempts" to push prices further.
The Philosophy: A candlestick does not just record price; it records the emotion of the market. It tells a story of the battle between the "Bulls" (buyers) and the "Bears" (sellers) during that specific timeframe.
History: The Rice Markets of Dojima
The roots of candlestick analysis stretch back to 18th-century Japan, specifically to the Dojima Rice Exchange in Osaka—the world’s first futures market.
1. What is a Candlestick? The First Lesson for Traders
The Anatomy of a Candlestick Candlestick analysis is widely recognized as the most effective tool for visualizing market sentiment. A standard candlestick is constructed from three key components that tell the story of the trading session:
The Real Body: This is the solid, wide portion of the candle. It represents the specific range between the Opening Price and the Closing Price, showing the core movement of the day.
The Upper Shadow: The thin line extending above the body. It marks the session's Highest Price, indicating how high buyers pushed the price before it was rejected.
The Lower Shadow: The thin line extending below the body. It marks the session's Lowest Price, indicating how low sellers pushed the price before it recovered.
Types of Candlesticks
Bullish Candle: Occurs when the Closing Price is higher than the Opening Price (Price rose).
Bearish Candle: Occurs when the Opening Price is higher than the Closing Price (Price fell).
Regional Color Differences Due to cultural norms, color coding varies by market (e.g., Red signifies a "rise" in China but a "drop" in the US). You can customize this preference in the Tiger App > Market Settings:
Red Up / Green Down (Traditional Asian Style)
Green Up / Red Down (International Style)
Single Candlestick- Candlesticks Reveal Market Dominance
1. Hammer
The relationship between the body size and shadow length reveals the struggle between Buyers (Bulls) and Sellers (Bears). We categorize single-day patterns by which side overpowered the other.
A. Long Lower Shadow (The "Hammer" Shape)
Appearance: A small body with a long lower shadow (at least 3x the body length) and no upper shadow.
Market Logic: Sellers pushed the price down significantly, but buyers aggressively drove it back up.
At Low Prices: Signals a Bullish Reversal (Hammer).
At High Prices: Signals a Bearish Reversal (Hanging Man).
B. Long Upper Shadow (The "Shooting Star" Shape)
Appearance: A small body with a long upper shadow (at least 3x the body length) and no lower shadow.
Market Logic: Buyers pushed the price up significantly, but sellers aggressively forced it back down.
At High Prices: Signals a Bearish Reversal (Shooting Star).
At Low Prices: Signals a Bullish Reversal (Inverted Hammer).
2. T-Line/Inverted T-Line
Extreme Reversals: The "T" Patterns. These are specific, powerful variations of the Doji where prices are pushed to an extreme but return to the opening level by the close.
A. Dragonfly Doji (The "T-Line")
Appearance: shaped like the letter "T". The Open, Close, and High prices are all at the same level, with a long lower shadow.
Market Logic: Sellers attempted to drive the price down, but buyers were strong enough to push it all the way back to the opening price by the end of the session.
Signal: A strong Bullish Reversal signal when found at the bottom of a downtrend (support).
B. Gravestone Doji (The "Inverted T-Line")
Appearance: Shaped like an upside-down "⊥". The Open, Close, and Low prices are all at the same level, with a long upper shadow.
Market Logic: Buyers attempted to rally the price, but sellers were strong enough to crush the rally and force the price back to the lows by the end of the session.
Signal: A strong Bearish Reversal signal when found at the top of an uptrend (resistance).
3.. Long Bullish/Bearish Candlesticks & Short Bullish/Bearish Candlesticks
Momentum vs. Hesitation: The Power of Body Size The size of the "Real Body" indicates the intensity of the buying or selling pressure.
A. Long Bullish / Bearish Candlesticks
Appearance: A very long body compared to recent candles.
Market Logic:
Long Bullish: Buyers are in total control with aggressive capital inflow.
Long Bearish: Sellers are panic-dumping or aggressively shorting.
Signal: High Momentum. These candles often kickstart a new trend or confirm a breakout. However, if they appear after a long trend, they may signal "exhaustion" (Climax).
B. Short Bullish / Bearish Candlesticks (Spinning Tops)
Appearance: A very small body with short shadows.
Market Logic: Neither buyers nor sellers have the energy to move the price significantly. Volume is usually low.
Signal: Consolidation or Hesitation. The market is "taking a breath."
If found within a trend, it is a pause.
If found after a long candle, it warns that the momentum is dying.
4. Star Candlesticks & Doji
The "Star" Patterns: Signs of Separation. A "Star" is a small-bodied candle (or Doji) that gaps away from the previous candle's body. The gap indicates a sudden shift in market sentiment.
A. Star Candlesticks (Bullish / Bearish)
Appearance: A small body (Spinning Top) that gaps above or below the previous large candle. The shadows can be of any length.
Market Logic: The gap represents a surprise.
Bullish Star: Price gaps down, but sellers fail to push it lower.
Bearish Star: Price gaps up, but buyers fail to push it higher.
Signal: A warning that the current trend has lost its momentum and is vulnerable to a reversal.
B. Doji Star
Appearance: A Doji (cross shape) that gaps away from the previous candle body.
Market Logic: Similar to a standard Star but stronger. The gap shows high energy, but the Doji shows total indecision.
Signal: A potent reversal warning. It is the key component of the famous "Morning Star" and "Evening Star" patterns.
C. Four Price Doji
Appearance: A simple horizontal line (–). The Open, High, Low, and Close are all the exact same price.
Market Logic: Extremely rare in liquid markets. It usually occurs in two scenarios:
Limit Lock: The asset hit a limit-up or limit-down, and no trading occurred at other prices.
Illiquidity: No one traded the asset during the session.
Signal: Extreme Caution. The market is either frozen or abandoned.
5. Marubozu
The Marubozu Variants: Analyzing the Start and Finish "Marubozu" means "bald" or "shaved head" in Japanese. These candles lack shadows on one or both ends, indicating specific moments of maximum conviction.
A. Full Marubozu (The Standard)
Appearance: A long body with no shadows on either end.
Market Logic: Total dominance from the first second to the last.
Signal: The strongest continuation signal available.
B. Closing Marubozu (Strong Finish)
Appearance: No shadow at the Closing end.
Bullish: No Upper Shadow (Closed at the High).
Bearish: No Lower Shadow (Closed at the Low).
Market Logic: Despite some counter-movement earlier in the day (the shadow on the other side), the session ended with the dominant side in full control.
Signal: Suggests momentum will carry over into the next day's open.
C. Opening Marubozu (Strong Start)
Appearance: No shadow at the Opening end.
Bullish: No Lower Shadow (Opened at the Low and never looked back).
Bearish: No Upper Shadow (Opened at the High and dropped immediately).
Market Logic: The dominant side took control immediately at the opening bell. However, slight resistance appeared at the end of the day (the shadow on the close side).
Signal: Strong, but slightly less bullish/bearish than a Closing Marubozu because of the slight profit-taking at the end.
1️⃣ When did you first truly “understand” candlestick charts?
A. When I learned the Hammer pattern
B. When I understood Doji and indecision
C. When I realized long bullish candles show momentum (honestly, sometimes it’s still intuition)
2️⃣ When you see a long upper shadow, what’s your first reaction?
A. Danger at the top — time to exit
B. Just a shakeout, nothing serious
C. Wait for the next candle to confirm
3️⃣ Looking back at $NVDA (NVIDIA)’s historical price action, which candlestick pattern do you think most often “tricks” traders?
A. A Doji after a long bullish candle
B. A shooting star near the highs
C. A gap star (gap up or gap down)
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When I see a long upper shadow, my instinct is to pause and wait for the next candle to confirm. It can signal rejection or profit-taking, but without follow-through, it’s just information, not a trade. That patience has helped me avoid acting too early.
Looking back at NVIDIA’s price action, the pattern that most often tricks traders is a Doji after a long bullish candle. It looks like a top, draws people into exiting or shorting, and then the uptrend resumes. In strong momentum stocks, hesitation often means a pause—not a reversal.
@Tiger_comments @TigerStars
Explanation: $NVIDIA(NVDA)$ historical price action is often characterised by periods of strong, bullish momentum fueled by AI enthusiasm. This often makes the Doji pattern particularly tricky.
A Doji after a long bullish candle is a classic sign of indecision or weakening buying pressure.
In a stock like NVIDIA that has a history of rapid extended ascents, this pattern often appears. It tempts traders to call a top, only for the stock to consolidate briefly and then continue its upward charge. This may lead to premature exits or short positions that get squeezed.
@Tiger_comments @TigerStars @TigerClub @CaptainTiger @Tiger_SG
Explanation: A long upper shadow or wick, especially when it appears after an uptrend , is a strong signal of seller dominance and potential bearish reversal. This is known as the shooting star pattern.
It means that Buyers pushed the price high during the period but were ultimately overpowered by sellers , who forced the price back down near the open or close.
However in trading , no single candle is a guaranteed signal. Waiting for the next candle to confirm the reversal helps avoid false signals or fakeouts.
@Tiger_comments @TigerStars @Tiger_SG @TigerClub @CaptainTiger
When I see a long upper shadow, I would wait for the next candle to confirm as it is the first sign of reversal.
A doji after a long bullish candle often ‘tricks’ traders as traders would wonder if the bull run has end and how they should position their trades.
@Fenger1188 @Kaixiang @LuckyPiggie @Universe宇宙 @HelenJanet @SPOT_ON @Success88 @DiAngel @SR050321 @Wayneqq come join
很多新手会执着于名字——锤子、流星、十字星，但在我看来，真正重要的是影线出现的位置和背景。比如长下影的锤子，如果出现在下跌末端，那是恐慌被接走的痕迹；但若出现在高位，它更像是多头最后的挣扎。形态本身从来不“看涨”或“看跌”，环境才决定它的意义。
Explanation: Understanding momentum, represented by long bullish candles, fundamentally shifts a trader's perspective from merely identifying shapes to interpreting the underlying market psychology.
While specific patterns like the Hammer are useful reversal signals and the Doji highlights indecision, recognising momentum helps to confirm trend strength and potential breakouts. This is a more holistic approach to charting.
@Tiger_comments @TigerStars @Tiger_SG @TigerClub @CaptainTiger
In order to trade them successfully in 2026, never look at a candle in isolation. You look for them at "areas of value" like support, resistance or moving averages.
Candles tell you what is happening but the trend tells you why. Even a perfect Hammer can fail if you are trading against a big market crash.
@Tiger_comments @TigerStars @Tiger_SG @TigerClub @CaptainTiger