Candlestick Patterns

The Morning Star and Evening Star are the most reliable with historical win rates around 72%. Three White Soldiers and Three Black Crows follow at 65%. Single-candle patterns like Hammer and Shooting Star have lower standalone reliability (57–62%) and require confirmation from the next session.

On daily charts, most single-candle reversal patterns resolve within 5–10 trading days (1–2 weeks). Three-candle patterns like Morning Star and Evening Star typically play out in 7–14 days. Continuation patterns like Three White Soldiers can take 10–14 days to fully develop.

Yes. Candlestick patterns are particularly useful for options entry timing. A Morning Star at support with RSI oversold is a high-conviction setup for buying calls. Evening Stars at resistance are ideal for buying puts or selling covered calls. The 2-week outlook aligns well with weekly options expirations.

Hammer and Hanging Man are visually identical — both have a small body near the top of the candle range and a long lower wick. The difference is context: a Hammer appears at the bottom of a downtrend and signals a bullish reversal, while a Hanging Man appears at the top of an uptrend and signals a potential bearish reversal.

Confirm with: (1) The next candle closing in the expected direction, (2) Above-average volume on the pattern candle, (3) Pattern forming at a key support or resistance level, (4) RSI or MACD aligning with the signal direction, and (5) Pattern on a higher timeframe (daily or weekly) rather than intraday.

Win rates vary: Morning Star and Evening Star lead at ~72%, Three White Soldiers and Three Black Crows at ~65%, Bullish and Bearish Engulfing at ~63%, Hammer and Shooting Star at 60–62%, and single-candle indecision patterns (Doji, Spinning Top) at 51–54%. These figures come from studies of daily-chart data across large-cap stocks; results vary by market conditions.

Yes, candlestick patterns work on any timeframe, but reliability increases on higher timeframes. Daily and weekly patterns have higher win rates and cleaner signals than 5-minute or 15-minute charts. For options trading, daily chart patterns are most actionable since they align with weekly and monthly expirations.

Start with Bullish Engulfing and Bearish Engulfing — they are visually obvious, require only 2 candles, and have solid win rates (~63%). Morning Star and Evening Star are excellent next steps: 3-candle patterns with the highest reliability (~72%). Avoid over-relying on single-candle patterns like Doji and Spinning Top as standalone signals until you understand market context.