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Beginner · 9 min · strategy

5 most important candlestick patterns

Doji / Engulfing / Hammer / Shooting Star / Inside Bar — covers 80% of your entry decisions.

fxcn editorial 2026-05-29

Candles are not magic

A candlestick only shows open, high, low and close for one period. It cannot predict the future alone, but it helps you read how buyers and sellers react at important levels.

Five patterns that matter

Doji shows hesitation and matters most near the end of a move. Engulfing shows one strong candle taking out the prior candle, best used near support or resistance. Hammer often appears after a selloff. Shooting Star shows rejection after an advance. Inside Bar shows volatility compression and often precedes a breakout.

How to avoid misuse

Do not trade a pattern just because it appears. It must happen at a meaningful location: previous high or low, trendline, moving average, supply-demand zone or post-news retest. Without location, a pattern is only a shape.

Practical process

Read higher-timeframe trend, mark key levels, wait for candle confirmation, then trade with fixed risk. Candles confirm a plan; they do not replace one.

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