Candlestick Pattern Guide

Candlestick Pattern Guide (2024)
In this guide, I’ll teach you the most reliable technical analysis tool that each trader needs to
master. It’s the easiest way to become self-reliant and confident with your TA.
I’ve used this guide to coach 100+ profitable traders and thousands more have used this to
improve their trading.
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This guide will help you interpret price action without the need to rely on fancy indicators,
influencers, or complex strategies.
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Let’s begin.
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Foundation of Candlestick Patterns
What is a candlestick?
This is a graphical representation of price movements over a specific time period. Each
candle has 4 key components:
- Open: The price where the candle begins

- Close: The price where the candle ends.
- High: The highest price reached by the candle.
- Low: The lowest price reached by the candle.
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Here’s how to identify each point on a candlestick:
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The key factors you need to understand about candlesticks is the relative size of the body
and the relative size of the wick.
Let’s discuss both in detail:

The size of a candlestick body in relation to its surrounding candles gives a clear visual
signal of market momentum.
This is how we determine the strength of buyers and sellers.
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To visualise price action using these candlesticks, use this technique: View the candlestick
bodies as armies.
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● Bulls are marching up
● Bears are marching down
● If they march a lot, they’re a strong army with a lot of stamina
● If they march a little, they’re less strong, but a successful march nonetheless.
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Now let’s visualise the candle wicks using the same analogy:
Wicks are like fallen soldiers on the battlefield. These are soldiers that attempted to march
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into enemy territory but failed.

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From the image above, you can see an army of bulls has gone up, been pushed back down
and then gone up again to gain ultimate victory.
This signifies a high degree of volatility and makes the candle a bit more neutral because
even though the bulls have moved price up, the bears have managed to push it downward.
Relative Size of the wick
● If the wicks are larger relative to the size of the body, we attach more significance to
the wick.
● If the body is larger than the relative size of the wicks, we attach more significance to
the body.
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Here’s how to visualise wicks above the candlestick body (Moving from left to right):
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1. The bullish army tried to enter enemy territory but the bears fought back and pushed
the price down. All of the wick represents fallen bull soldiers. The bulls gained some
ground but also lost a lot of soldiers in the process.
2. Bulls managed to gain ground but lost fewer soldiers this time.
3. Bulls managed to gain ground but barely lost any soldiers. This is a sign of strength.
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4. Bulls gained ground and lost no soldiers. This is the strongest bullish candle.
5. This is the strongest bearish candle. With a bearish wick representing all the fallen
bull soldiers.
6. Fewer bulls have fallen but still a strong bearish candle.
7. Even fewer/ barely any bulls have fallen.
8. No fallen bulls.
Wicks Below
This is the reverse of the previous example. Wicks below are fallen bear soldiers or bullish
wicks.
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Summary of the wicks:
● Large Wick: Represents fallen bulls or bears

○ Very uncertain
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○ Lots of movement/ volatility

● Small Wick: Less of a battle going on
○ Little uncertain
○ Little movement/ volatility
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Now, let’s use everything we’ve learnt here and apply it to this Bull Vs Bear Meter. This
helps us understand every single candlestick pattern there is.
On the one end, we have the bulls winning the war and on the other end, we have bears
winning. Every time, this battle is constantly ongoing and we move our bias across this
meter from bullish to bearish.
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Use this understanding of relative sizes of candlestick bodies and wicks to form biases in the
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market. Then apply it to the charts and start interpreting price action to take on trades.
If you like the way I teach and want to learn more about candlestick patterns, join my
Telegram. I’m releasing another full PDF on how to use these theories to make money
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trading, different types of candles (Hammer, Doji, etc.), and understanding candles within the
market context.
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Candlestick Pattern Guide (2024)

- Open: The price where the candle begins

Let’s discuss both in detail:

This is how we determine the strength of buyers and sellers.

into enemy territory but failed.

Relative Size of the wick

● Large Wick: Represents fallen bulls or bears

○ Lots of movement/ volatility

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