Technical Price Action Library
Candlestick Pattern Guide
Master high-probability price action candle patterns and systematic entry/stop rules.
Bullish Engulfing Pattern
BullishA large green body completely engulfs the previous small red candle body after a downtrend, signaling strong institutional buy pressure.
Entry Rule: Enter Long on closing of the engulfing candle or limit order at 50% retracement of the candle body.
Stop Loss Rule: Place Stop Loss 5-10 pips below the lowest wick of the engulfing candle.
Hammer Candlestick
BullishSmall real body at the top with a long lower shadow (at least 2x the body length), representing rejection of lower prices.
Entry Rule: Enter Long on break of the Hammer high.
Stop Loss Rule: Place Stop Loss below the lower shadow tail.
Bearish Engulfing Pattern
BearishA long red candle body fully covers the preceding green body at major key resistance, signaling institutional supply dump.
Entry Rule: Enter Short on closing of the bearish engulfing candle.
Stop Loss Rule: Place Stop Loss above the highest wick of the pattern.
Morning Star Pattern
BullishA 3-candle reversal: long bearish candle, small indecision candle (Doji/Spinning Top), followed by a strong bullish candle.
Entry Rule: Enter Long on third candle closure above 50% of the first candle.
Stop Loss Rule: Place Stop Loss beneath the lowest point of the middle indecision candle.
Shooting Star
BearishSmall body near the bottom with a long upper wick at resistance, showing buyers failed to sustain momentum.
Entry Rule: Enter Short on break of Shooting Star candle low.
Stop Loss Rule: Place Stop Loss above the tip of the upper wick.