Beginner 3 min read
Doji, hammer, engulfing — the 5 candles to know
The single-candle patterns that signal a reversal. With the chart examples that prove (and disprove) each one.
Doji — open and close nearly equal; indecision, only meaningful after a strong trend. Hammer — small body, long lower wick, at the bottom of a downtrend; buyers rejected new lows. Shooting star — the inverse, at the top of an uptrend. Bullish/bearish engulfing — a candle whose body fully swallows the prior candle's body; a decisive shift in control.
None of these work in isolation — they're contextual signals that only mean something at a level that already matters (support, resistance, a trendline). The same hammer in the middle of a range is just noise.