Price Action Guide

Candlestick Patterns Guide: All Bullish, Bearish & Doji Patterns Explained (with CPR Tie-In)

Every candlestick pattern tells a story about who's winning the fight between buyers and sellers. This guide covers every major pattern with a clear illustration, plus how to combine each one with the CPR strategy.

Quick Answer

Candlestick patterns are formed from a stock's open, high, low, and close prices, and reveal market sentiment — bullish, bearish, or indecision. The most reliable patterns are the Bullish/Bearish Engulfing, Hammer, Shooting Star, and Doji. For best results, combine them with support/resistance, volume, and CPR (Central Pivot Range) levels — trading a pattern in isolation is risky.

What Is a Candlestick Pattern?

Every candlestick represents the open, high, low, and close prices for a fixed time period — 5-minute, 15-minute, or daily. When several candles line up into a recognisable shape, like an engulfing pair or a hammer, that's a candlestick pattern. These patterns are a window into market psychology: they show you who's in control, buyers or sellers.

In swing trading — holding positions from a few days to a few weeks — candlestick patterns give you precise entry and exit timing, especially when combined with CPR levels or moving averages.

Bullish Candlestick Patterns (With Illustrations)

Bullish Reversal

1. Bullish Engulfing Pattern

A small bearish candle is followed by a larger bullish candle that fully "engulfs" it. This signals a strong reversal of a downtrend — buyers have taken control.

How to trade it: Wait for confirmation the next day. Enter a long position once price closes above the engulfing candle's high.
Bullish Reversal

2. Hammer Pattern

A small body sitting at the top of the range with a long lower shadow. It forms after a downtrend and signals the market is finding support and attempting to reverse.

How to trade it: A hammer near a key support level is a strong signal. Enter long after a bullish close above the hammer's high.
Bullish Reversal

3. Morning Star

A three-candle pattern: a large bearish candle, followed by a small-bodied candle, followed by a large bullish candle. This shows selling pressure fading and buyers building momentum.

How to trade it: Enter long after the third bullish candle closes, to ride the emerging uptrend.

Bearish Candlestick Patterns

Bearish Reversal

4. Bearish Engulfing Pattern

The inverse of bullish engulfing — a small bullish candle followed by a larger bearish candle that engulfs it. Sellers have taken control, and a reversal may follow.

How to trade it: Wait for bearish confirmation, then enter short once price closes below the engulfing candle's low.
Bearish Reversal

5. Shooting Star

The inverse of the hammer — a small body with a long upper shadow. It forms after an uptrend, showing buyers tried to push price higher but failed.

How to trade it: Enter short after a bearish close below the shooting star's low — sellers are taking control.
Bearish Reversal

6. Evening Star

The bearish counterpart of the Morning Star — a large bullish candle, a small-bodied candle, then a large bearish candle. Signals an uptrend may be ending.

How to trade it: Enter short after bearish confirmation from the third candle.

Doji Candlestick Pattern

Indecision

7. Doji

When the open and close prices are nearly identical, you get a tiny or non-existent body with long shadows on both sides. This reflects market indecision and often precedes a significant move.

How to trade it: A Doji at the end of an uptrend or downtrend can signal a reversal. Wait for the next candle to confirm direction before entering.

CPR + Candlestick Combo: Trading Direction's Core Framework

Reading a candlestick pattern in isolation isn't enough. In Anil Hanegave's CPR Brahmastra Strategy, every pattern is filtered through Central Pivot Range (CPR) levels:

  • Support/Resistance: A Hammer forming near the CPR's Bottom Central (BC) carries a higher reversal probability.
  • Trend alignment: Patterns that form in the direction of Weekly-Daily-Previous (WDP) CPR alignment tend to be far more reliable.
  • Volume confirmation: A Bullish Engulfing candle on a high-volume CPR breakout is one of the strongest signals in the framework.
  • Risk management: Always place a stop loss — just beyond the CPR level on the opposite side of your entry.

All Candlestick Patterns — Cheat Sheet & Free PDF

Want a quick-reference candlestick pattern cheat sheet with every bullish and bearish pattern in one place? Here's the full set at a glance:

Bullish Engulfing
Hammer
Morning Star
Bearish Engulfing
Shooting Star
Evening Star
Doji

Watch: Candlestick Patterns Explained by Trading Direction

📺 Trading Direction (@tradingdirection)

📺 Trading Direction (@tradingdirection)

Download the Free Candlestick + CPR Cheat Sheet

All patterns, illustrations, and CPR levels in one PDF guide — from Trading Direction.

Frequently Asked Questions

Where can I get a free candlestick pattern PDF guide?

Trading Direction's store page offers a free CPR Trading Guide that includes a candlestick cheat sheet. Click "Download Free Guide" above.

What's the most reliable bullish candlestick pattern?

Bullish Engulfing and Hammer are generally considered the most reliable, especially when they form near a support level or CPR zone and are confirmed by volume.

What does the Doji candlestick pattern mean?

A Doji shows market indecision — the open and close prices are nearly equal. It often appears before a trend reversal, but shouldn't be traded in isolation; wait for the next candle to confirm direction.

Can candlestick patterns be traded on their own?

Technically yes, but it isn't recommended. Combining patterns with support/resistance, CPR levels, and volume significantly improves accuracy.

Anil Hanegave
Trader | Mentor | Author — Trading Direction
WA Group 🏹 Live Webinar, Sun

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