Candlestick Patterns

Candlestick patterns are specific formations created by one or more candlesticks on a price chart. Originally developed in 18th-century Japan for rice trading, these patterns help traders identify potential reversals, continuations, and moments of market indecision.

Each candlestick shows four price points — open, high, low, and close — and the relationships between consecutive candles form recognizable patterns that signal shifts in market sentiment.

In StratBase, candlestick patterns are implemented as indicator-based signals. Each pattern is a binary indicator that outputs:

• 1.0 — pattern is detected on the current candle
• 0.0 — pattern is not present

This means you use them in conditions just like any other indicator:

{ left: "DOJI", operator: "greater_than", right: "0" }

The engine scans each candle (and its neighbors where needed) and marks where patterns appear. No additional parameters are required — patterns are detected automatically based on their geometric rules.

StratBase includes 61 candlestick patterns organized into 5 groups by signal direction:

Bullish Reversal (16 patterns)

Patterns that signal a potential reversal from a downtrend to an uptrend:

• Hammer — small body at the top, long lower shadow (2x+ body)
• Inverted Hammer — small body at the bottom, long upper shadow
• Bullish Engulfing — large green candle fully engulfs previous red candle
• Piercing Line — green candle opens below prior low, closes above midpoint
• Morning Star — three-candle pattern: red, small body, green
• Morning Doji Star — morning star with a doji as the middle candle
• Three White Soldiers — three consecutive green candles with higher closes
• Bullish Harami — small green candle within prior large red candle
• Bullish Harami Cross — harami with a doji as the second candle
• Tweezer Bottom — two candles with matching lows at support
• Bullish Kicker — gap up reversal after a red candle
• Bullish Abandoned Baby — gap-down doji followed by gap-up green candle
• Three Inside Up — bullish harami confirmed by third higher close
• Three Outside Up — bullish engulfing confirmed by third higher close
• Concealing Baby Swallow — four black marubozu candles pattern
• Unique Three River Bottom — three-candle bottom reversal

Bearish Reversal (15 patterns)

Patterns that signal a potential reversal from an uptrend to a downtrend:

• Hanging Man — hammer shape at the top of an uptrend
• Shooting Star — inverted hammer at the top of an uptrend
• Bearish Engulfing — large red candle fully engulfs previous green candle
• Dark Cloud Cover — red candle opens above prior high, closes below midpoint
• Evening Star — three-candle pattern: green, small body, red
• Evening Doji Star — evening star with a doji as the middle candle
• Three Black Crows — three consecutive red candles with lower closes
• Bearish Harami — small red candle within prior large green candle
• Bearish Harami Cross — harami with a doji as the second candle
• Tweezer Top — two candles with matching highs at resistance
• Bearish Kicker — gap down reversal after a green candle
• Bearish Abandoned Baby — gap-up doji followed by gap-down red candle
• Three Inside Down — bearish harami confirmed by third lower close
• Three Outside Down — bearish engulfing confirmed by third lower close
• Advance Block — three green candles with diminishing bodies

Continuation (10 patterns)

Patterns that suggest the current trend will continue:

• Rising Three Methods — long green, three small red, long green
• Falling Three Methods — long red, three small green, long red
• Upside Tasuki Gap — gap up followed by a small pullback candle
• Downside Tasuki Gap — gap down followed by a small bounce candle
• Side by Side White Lines — two similar green candles side by side
• Mat Hold — strong trend candle, small retracement, continuation
• In Neck — red continuation after green candle
• On Neck — close at the low of the previous candle
• Thrusting — similar to piercing but closes below midpoint
• Separating Lines — same open as prior candle, opposite direction

Indecision (10 patterns)

Patterns that indicate market uncertainty:

• Doji — open equals close (very small body)
• Long-Legged Doji — doji with long upper and lower shadows
• Dragonfly Doji — doji with long lower shadow, no upper shadow
• Gravestone Doji — doji with long upper shadow, no lower shadow
• Spinning Top — small body with shadows on both sides
• High Wave — very long shadows relative to body
• Rickshaw Man — doji variant with equal shadows
• Homing Pigeon — smaller candle within prior candle (same direction)
• Matching Low — two candles with identical closing prices
• Stick Sandwich — ABA pattern with matching closes

Universal (10 patterns)

Patterns that can signal either direction depending on context:

• Marubozu — full body candle with no shadows
• Belt Hold — opens at extreme, strong directional candle
• Counterattack — opposite candle closing at same level
• Tri Star — three consecutive doji candles
• Breakaway — gap followed by progressive weakening
• Ladder Bottom/Top — progressive pattern with final reversal candle
• Two Crows — gap up, two red candles pattern
• Three Stars in the South — three red candles with diminishing range
• Closing Marubozu — no shadow on the closing side
• Opening Marubozu — no shadow on the opening side

| Condition | Meaning | |-----------|---------| | DOJI > 0 | Doji pattern detected on current candle | | BULLISH_ENGULFING > 0 | Bullish engulfing pattern detected | | HAMMER > 0 | Hammer pattern detected | | EVENING_STAR > 0 | Evening star pattern detected |

• Candlestick patterns work best when combined with trend indicators (SMA, EMA, ADX) for confirmation
• Single-candle patterns (Doji, Hammer) are less reliable alone — combine with support/resistance levels
• Multi-candle patterns (Morning Star, Three White Soldiers) are generally more reliable
• Use pattern presets to quickly add common pattern groups to your strategy
• Patterns at key price levels (previous day high/low, pivot points) carry more significance
• Higher timeframes (4h, daily) produce more reliable pattern signals than lower timeframes