Source: “21 Candlesticks every trader should know” by Melvin Pasternak

 The message of candlesticks is most powerful when the markets are at an

extreme, that is when they are overbought or oversold.
 no one candlestick should be judged in isolation - patterns consisting of 2 or 3
candlesticks are more reliable than single candle patterns


Candlestick pattern from Thomas Bulkowski’s “Encylopedia of Candlestick Charts”

Reversal in bear (what I want for going long)

The top 5 best candles acting as reversals in bear markets are (based on how often price
reverses, shown as a percentage):
1. Three stars in the South: 100%
2. Breakaway, bearish: 89%
3. Three white soldiers: 84%
4. Three-line strike, bullish: 83%
5. Engulfing, bullish: 82%

Reversal in bull (I do not need as I do cannot short stocks, yet)

The top 5 best candles acting as reversals in bull markets are (based on how often price
reverses, shown as a percentage):
1. Three stars in the South: 86%
2. Three-line strike, bearish: 84%
3. Three white soldiers: 82%
4. Identical three crows: 79%
5. Engulfing, bearish: 79%

Continuations in Bull Market

The top 5 best candles acting as continuations in bull markets are (based on how often
price continues, shown as a percentage):
1. Mat hold: 78%
2. Deliberation: 77%
3. Concealing baby swallow: 75%
4. Rising three methods: 74%
5. Separating lines, bullish: 72%

Continuations: Bear Market

The top 15 best candles acting as continuations in bear markets are (based on how often
price continues, shown as a percentage):
1. Kicking, bearish: 80%
2. Rising three methods: 79%
3. Separating lines, bearish: 76%
4. Deliberation: 75%
5. 13 new price lines: 74%