There are literally hundreds of candlestick patterns that traders use to increase their trading performance. Best used with other technical analysis tools, here are the top 10 patterns that provide the most consistent results.

* Dark Cloud Cover: This is a two-day formation which arises when the candlestick formed on the first day has a long white body followed by an opposite colored candlestick, which opened at a new high only to close below is the midpoint of the previous day’s trading. This pattern is considered a bearish reversal signal.

* Doji: Sometimes called a Doji star because the candlestick resembles a star. The doji star forms when the buyers and sellers are equal and price remains relatively static. There can be variances in the high and low a little, but the open and close are very close.

* Engulfing Pattern: This is a two-day pattern where the first day’s body is smaller than the subsequent candlestick, and they are both of opposite colors. This pattern is considered bearish when it appears at the end of an uptrend and bullish when it occurs in a down trending market.

* Evening Star: Commonly regarded as a bearish reversal pattern, this three-day pattern consists of a long white body, followed by a smaller gap up candlestick, with the third and final day closing below the midpoint of the first day.

* Hammer: The hammer is a 1 candlestick formation. It looks like a hammer. It has a hammer head and a handle. The handle tells us that price tried hard to push down, but failed to stay there and ended up closing near the open. This is bullish anywhere you see it.

* Hanging Man: Identical to the Hammer, this candlestick pattern occurs during an uptrend, and signals a continuation of the price movement.

* Harami candlestick: This is a 2 candlestick formation. It resembles the exact opposite as the engulfing pattern. This pattern will show price opening and closing within the open and close of the previous candlestick and demonstrates a potential reversal in the short term trend. This can be bullish or bearish depending on the color of each candlestick and where it appears in the trend. Each candlestick will be a different color.

* Morning star pattern: A bullish 3 bar pattern. The morning star pattern will start out bearish continuing the prevailing trend. Then it will gap down and turn up ever slowly closing above but near the open. The next day BAM, it will gap up and close much higher than the open.

* The piercing line: This pattern is just two candlesticks. It is a bullish reversal pattern. What happens here is the first candlestick will continue the bearish trend down and the next will appear to be following suite on the open but will surprise you as it closes much higher and exceed the 50% level of the first candlestick.

* Shooting star: This is a single candlestick pattern. It looks like an upside down hammer and signals a bearish reversal. As such it’s best when found on a bullish uptrend. Look to the long upper witch for the intuitiveness in this candlestick. The bulls pushed hard like they did in the prevailing trend but the bears won the race by days end closing near the low / open.

Related posts:

1. How 10 candlestick patterns rise above
2. Understanding Candlestick Patterns (Part I)
3. Master the Craft of Candlestick Patterns
4. Japanese Candlesticks Step by Step
5. What Are Double Tops Chart Patterns?

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