Patterns analysis
A candlestick shows four prices for one bar: the open, high, low and close. Certain shapes, alone or in short runs, have been watched for generations because of what they say about the struggle between buyers and sellers. OHLCX Markets finds them for you and explains each one.
What the scan looks for
The Candle patterns tab on an asset page checks the recent bars against more than sixty named patterns, from single candles such as the Doji and the Hammer to multi-candle formations such as the Engulfing Pattern, the Morning Star and Three Black Crows.
Only patterns on the most recent bars are listed. An old pattern has already played out, one way or the other, and no longer says anything about now.
Three kinds of pattern
Every pattern found is labelled with its kind:
- Reversal
- Suggests the current move is running out. After a decline it hints at a turn up; after an advance, a turn down.
- Continuation
- Suggests the move is pausing rather than ending, and is expected to carry on in the same direction.
- Indecision
- Neither side won the bar. On its own it says little; after a strong move it warns that the move is tiring.
Reading a pattern on the page
Each entry shows whether the pattern formed as bullish or bearish, its name, the bar it formed on, how many candles make it, what the shape looks like, and what it suggests. You do not need to memorise sixty definitions to use the tab.
Each also carries a reliability rating of low, moderate or high. That is how candlestick references usually rate the pattern. It is not a success rate measured on that symbol.
Context decides what a pattern means
The same candle means different things in different places. A Hammer after a long decline is worth noticing. The identical shape in the middle of a flat week is noise. Always read a pattern against the trend it appears in, which is why the tab sits inside the Technical analysis section, next to the trend and momentum readings.
Bar size matters as well. A pattern on daily bars reflects a full session of trading and carries more weight than the same pattern on one-minute bars.
Wait for confirmation
A pattern is a suggestion until the next bars agree with it. Traders who use them typically look for a following bar that moves in the suggested direction, and for other evidence, such as a nearby pivot level or a supporting indicator, before treating it as meaningful.
Patterns analysis, answered
How many candlestick patterns does OHLCX Markets detect?
More than sixty, covering the single-candle, two-candle and multi-candle patterns found in standard references.
Why does the tab sometimes say no patterns formed?
Patterns are not present on every bar. If none formed on the latest bars at the chosen bar size, the tab says so. Trying another bar size may show some.
What does the reliability rating mean?
It is the rating candlestick references usually give the pattern: low, moderate or high. It describes the pattern in general, not how it has performed on that symbol.
Can one bar show both a bullish and a bearish pattern?
Yes. Different patterns can form on the same bar, and occasionally they point in opposite directions. That in itself is a sign of an undecided market.
More about what an asset page shows
Performance metrics
How far an asset has moved, over the last month, the last quarter and the year so far.
Read the guide →Risk characteristics
How rough the ride has been: drawdown, volatility, and return per unit of risk.
Read the guide →Technical analysis
More than twenty indicators, moving averages and pivot levels, read into one plain verdict.
Read the guide →Historical prices
A chart in eight bar sizes and a table of recent bars with open, high, low, close and volume.
Read the guide →Research here. Trade on OHLCX.
OHLCX is a trading platform built for execution. Link your Schwab account to see these same readings on live quotes, place orders with advanced exit flows in one click, and let strategies run on your rules.