Candlestick Patterns for Day Trading PDF

I don’t particularly trade too many different candlestick patterns. I find it confusing to use too many patterns in making a decision. It’s as if some people believe they can actually read the hidden message the price is trying to tell them rather than simply a high probability opportunity.

So they memorize as many patterns as possible without understanding why and in what context they may be effective in the first place. Some patterns are neither here nor there in their effectiveness and certainly not with-ought the context of support/resistance, moving averages, trends, and fundamentals that drive these trades in the first place.

Compound this with the fact that there is no real proof offered that these patterns actually turn a profit and you have a recipe for failure.

Candlestick Patterns

I will refer to only a few candlestick patterns. You’ll need to download the PDF below to follow along with visuals.

My focus will be on exhaustion candle and indecision bars only. This short list of candlestick patterns is because I use only these patterns in continuation and reversal trades. They are the most consistent in their predictive power, but only when combined with other technical and fundamental factors. They are close to useless by themselves. I find these to be the most consistent among all the candlestick patterns

In both types of trade setups that I use these candles essentially help find a small reversal both in the direction of a trend and also exhaustion of the trend at a significant reversal.

It is better to keep it simple and use only a small selection of candlestick patterns and just the most reliable because they aren’t that reliable by themselves, to begin with. Keeping it simple helps us stay focussed when making a trading decision.

RSI, support/resistance, volume, and fundamental analysis all compliment your technical analysis. However, some of the critical candlestick stock chart patterns mentioned below add an essential layer to your trading. They help alert you to reversals. I said stocks because they’re used extensively in charting these markets, but they can be used in many markets including forex.

Candlesticks were created in the 1700s in Japan to help trade rice futures. Steve Nison brought them to English speaking communities through his famous book “Japanese Candlestick Charting Techniques.” Again, there are many patterns, but let’s focus only a few, the higher probability ones.

Bullish Candlestick Patterns

I will focus on three types of indecision candles and ton type of exhaustion: the Doji candlestick pattern, Gravestone Doji pattern, dragonfly Doji pattern and pin bars as exhaustion bars. These are shown in figures 1 through 6 in the downloadable PDF.

Diagram 1 shows a typical Doji occurring at the end of a downward trend. This reversal pattern must be taken in conjunction with a trend line, fundamental trend, support/resistance or round number. Diagram 1 also shows the corresponding levels of confluence of support needed to have a higher probability reversal.

Diagram 2 shows a reversal at a bottom near a Gravestone Doji or Inverted Hammer candlestick. This Doji is a level of indecision which in conjunction with the other factors shown provide a higher probability entry for a long trade.

Diagram 3 shows a Pin Bar reversal at a bottom. It is also known as the Hammer candlestick pattern. Here price tries to move lower but exhausts itself and move back near the price entry point.

Bearish Candlestick Patterns

Diagram 4 shows s typical Doji candlestick pattern occurring at the end of a rising trend. Again, this reversal pattern is not a guarantee of a reversal, but it can be a warning of one. It must be traded in conjunction with a trend line, fundamental trend, support/resistance or round number. Diagram 1 also shows the corresponding levels of confluence needed to have a higher probability reversal.

Diagram 5 shows a reversal at a top situated near a Dragonfly Doji candlestick. Again, with this sign of indecision is included the other factors of confluence needed for a higher probability entry. These other factors of convergence include support/resistance, moving averages, trend breaks, and oversold/overbought areas.

Diagram 6 shows a Pin Bar reversal at a top. It is also known as the Shooting Star candlestick pattern. Here price tries to move higher but again exhausts itself and move back to the price entry point.

Day Trading Chart Patterns

Patterns are not enough. Most using technical techniques alone will fail. That’s why I’ve included other factors to consider with your trading. There’s a more thorough list of these factors in the downloadable PDF below.

You need to include meditation and visualization as well as intake of daily news and fundamentals as part of your trading. I’m sure some are successful incorporating volume with technicals, but the point is technicals by themselves are in general insufficient, The meditation and visualization habits are not as necessary for long term investing as they are for day trading since day trading results in intense, stressful decision making. Long term trading or investing tend to be more precise and less stressful.


If I seem redundant in my continual drumbeat to move beyond the technicals such as candlestick chart analysis, it’s not because I view them as useless. They are insufficient alone to result in reliable trading success.

In the PDF below I include more on what’s necessary to combine with the candlestick patterns in forex. Please have a look.

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John Leonardo

John Leonardo invests and trades in forex and crypto on a regular basis. He publishes his articles on trading/investing regularly on both the blog and youtube. When trading, John explains how and why these trades were entered so people can learn about implementing the combination of technical, sentiment, fundamental and news trading.

  • Paolo says:

    Hi! I’m a newbie in the trading world but I have quickly arrived to this conclusion you mentioned here: patterns are not enough. I thought I could make it only paying attention to patterns and have learnt it the ugly way. I’m really interested in all the valuable points you still have ahead. Thank you very much!

    • What you need are candlestick patterns explained with examples using fundamentals news, trend lines and key levels. I’ll try to provide future articles with this. In the meantime see my articles on money management to remind yourself of the key fundamental things you should practice to become profitable.

  • Henderson says:

    I first familiarized myself with the drumstick patterns when I met with a friend who was telling me about forex. I didn’t know that it has been used in some other aspects of life as well. I must say that it is very beautiful to see that you can give the awesome information that I have gotten here. I see that there are some different strategies to take when doing this.  I will like to try it

    • Candlestick chart patterns in forex such as the inverted hammer candlestick, doji candlestick pattern, pin bars, and even some indecision bars all have something in common. They all tend to have extended wicks. When found at key levels, in the direction of a trend backed up by fundamental news, these wicks can be powerful clues of a trend continuation and good point of entry.

      Candlestick chart analysis is not as complicated as some people make it out to be. Only with a combination of something like support and resistance are these most profitable chart patterns actually valid.

  • Gihan Akalanka says:

    WOW, great content!

    I love to invest in Crypto. but I didn’t have a place to get information until I found this place.

    After I read your PDF I got a clear idea about candlestick patterns. that PDF has visuals patterns. Those visuals helped me to clearly understand the patterns.

    Realy appreciate sharing valuable content. Keep it up!!

  • Benson says:

    Hello John, I must commend your honesty in this post. Investing in cryptocurrency and forex have been one of the coolest means to having some money without stress like so many people. However when it comes to keeping track of ones wallet and making sure he doesn’t run at loss, its been an issue for lots of people  and this have been my reason for not investing in any just yet. Hearing about candlestick seem like a really nice means to educating people more about their buying and investing, and I’ll love to learn more about it. Thanks for sharing.

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