Types of candlesticks and their meaning

Shape gives the name

Candlesticks get their names from the proportions of the body and the wicks. The four prices are the same in every case: open, high, low and close. What changes is how they sit relative to each other.

The meanings below are how traders usually read each shape. They are readings, not rules, and no shape has to be followed by any particular move.

Doji

Open and close are equal or almost equal. The body is a thin line, with wicks above and below.

Marubozu

A candle with a long body and little or no wick. The open and close sit at or near the low and high.

Spinning top

A small body with wicks of similar length above and below.

Hammer

A small body near the top with a long lower wick and little upper wick.

Shooting star

A small body near the bottom with a long upper wick and little lower wick.

Doji and spinning top: indecision

A doji opens and closes at about the same price. The period moved, but ended where it began. A spinning top has a small body and wicks on both sides, so price moved up and down but finished close to the open.

Traders often read both as a pause or indecision. A pause can be followed by a move in either direction, so the shape alone says little. Where it appears matters more than that it appears.

A candle’s name describes its shape. What it means depends on where it sits and what you have tested.

Marubozu: one-sided periods

A marubozu has a long body and almost no wicks. A bullish one opens near its low and closes near its high. A bearish one does the reverse. Price moved one way for the whole period.

Traders read it as a period with one side in control. It is a description of the period. It does not say how long that will last.

Hammer and shooting star: long wicks

A hammer has a small body near the top and a long lower wick. Price fell during the period and came back to close near the open. A shooting star is the mirror: a small body near the bottom and a long upper wick.

These are often read as signs that a move was rejected. The same shape is sometimes called a hanging man or an inverted hammer, depending on where it appears. The names change, and the shape is the same.

Patterns made of more than one candle

Some patterns need two or three candles. An engulfing pattern is a candle whose body covers the previous candle’s body. A harami is the reverse, a small candle inside the previous body. The morning star and evening star use three.

These patterns have more rules to pin down than a single shape. How much smaller counts as small? Does the wick count? A test needs those answers written down.

The futures angle

Candle shapes depend on the timeframe. A shape that is a marubozu on a 1-minute chart can sit inside a doji on the 1-hour chart that contains it. Our data is 1-minute bars, and longer candles are built from them.

A roll between contract months can leave a gap in the series, and a gap can change a candle’s shape without any trading having happened. We run on raw, unadjusted prices and handle rolls as explicit events. Replay it on real NQ data, free, in the Trade Lab.