Single candlestick patterns: doji, hammer, shooting star
The body and shadows of a single candle tell you what happened between buyers and sellers during that period. But the same candle can have different meanings depending on where it appears in the trend.
In the chart above, you see a thin frame around some candles. The frame indicates a candlestick pattern recognized by the system; its color tells you the pattern's tendency: green for bullish, red for bearish, orange for indecision. During playback, the name and a brief description of the pattern appear in the top bar.
In the candlestick chart lesson, you learned that the body shows the range between the open and close, and the shadows (wicks) show the highest and lowest prices during the period. Single candlestick patterns are read from the ratios of these parts.
In a Doji, the body is almost non-existent: the price closed where it opened. Buyers and sellers finished that period in a draw. A doji with a long lower shadow is called a dragonfly doji; sellers pushed the price down, but buyers recovered all of it. One with a long upper shadow is called a gravestone doji and indicates the opposite.
A Hammer is a candle with a small body and a long lower shadow. If it appears at the end of a downtrend, it indicates that buyers have strongly entered at the bottom. If the same shape appears at the top of an uptrend, it is called a hanging man, and this time it is a warning: strong selling occurred during the period, and the price barely recovered. A Shooting Star and an inverted hammer are also such a pair: a long upper shadow at the top of an uptrend is a shooting star (bearish tendency), and at the bottom of a downtrend, it is an inverted hammer (bullish tendency). The system makes this distinction based on the price's position relative to the 50-candle average.
A Marubozu is a long-bodied candle with almost no shadows: one side dominates from the beginning to the end of the period. A Spinning Top, on the other hand, is a small-bodied candle with shadows on both sides and indicates indecision.
All these patterns are the story of a single period. Therefore, a candlestick pattern by itself is not a reason to trade, but a small clue to be read in conjunction with a support, resistance, or trend context.
How to read it
- First, look at the context: is the candle at the bottom of a downtrend, at the top of an uptrend, or in the middle of a sideways band?
- The same shape can have two names: hammer at the bottom, hanging man at the top. Read the location, not the name.
- Wait for the candle that follows the pattern: a reversal is confirmed by the close of the next candle.
- Match the pattern with a level: a hammer appearing at support is more significant than a hammer appearing in the void.
We measured
Single candlestick patterns appear very frequently. In 54 charts, among 9,396 candles, the number of single-candle patterns was 1,543; meaning roughly one in every six candles had a single-candle pattern. The most common were spinning tops (621), dojis (273), and long upper shadows (212). Something that appears so frequently cannot be expected to be a strong signal on its own: a single candle gains meaning only when it appears in the right place.
Source: BBL measurement: 24 most liquid BIST stocks and 12 major cryptos (4-hour); 10 stocks and 8 cryptos (daily); 54 charts, 9,396 candles; rules from TradingView 'All Candlestick Patterns' port. ·
Trap
The most common mistake is to assume every doji or every hammer is a reversal signal. As the measurement above shows, these candles appear very frequently; most are ordinary periods where nothing reverses. The second mistake is ignoring the context: a 'hammer' at the top of an uptrend is actually a hanging man and has the opposite meaning. The third mistake is giving as much weight to candlestick patterns in small timeframes as in daily charts.
Tip
In the analysis screen, candlestick patterns stand alongside other evidence on the evidence card. If a support level or RSI oversold condition also accompanies a hammer, different pieces of evidence are saying the same thing; a hammer alone, however, is a weak clue.
Glossary
- Doji
- A bodyless candle where the open and close are almost the same; indicates indecision.
- Hammer / hanging man
- A small-bodied candle with a long lower shadow; called a hammer at the bottom of a downtrend (bullish tendency), and a hanging man at the top of an uptrend (bearish tendency).
- Shooting star / inverted hammer
- A small-bodied candle with a long upper shadow; called a shooting star at the top, and an inverted hammer at the bottom.
- Marubozu
- A long-bodied candle with no or very short shadows; indicates that one side dominated throughout the period.
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Examine candlestick patterns on the evidence card in an analysis →For information only, not investment advice.