23 Price Action Patterns Every Forex Trader Should Know
(With Free MT5 Indicator)

Candlestick patterns are the vocabulary of price action trading. They encode the balance between buyers and sellers within a defined period — and when they appear at the right location, they offer high-probability clues about where price is likely to go next.

This guide covers all 23 patterns detected by Price Action Patterns Pro, a free MT5 indicator, organized from single-candle formations to complex three-candle reversals. For each pattern, we cover what it signals, the geometry that defines it, and what to look for before acting on it.

Single-Candle Patterns

Single-candle patterns are the foundation of price action reading. They capture the story of one session: where price opened, how far it moved in each direction, and where it closed.

1. Pin Bar

The Pin Bar is the most widely traded single-candle pattern in retail forex. Its defining characteristic is a long wick (at least 70% of the total candle range) with a small body (no more than 20% of range) and minimal opposing wick. A bullish pin bar has a long lower wick, indicating that sellers drove price down significantly before buyers rejected that move and pushed price back up. A bearish pin bar has a long upper wick with the same logic reversed.

Pin bars are most meaningful at key support and resistance levels, moving average confluences, or previous swing highs and lows. A pin bar forming in the middle of a range with no technical significance is a low-quality signal.

2. Dragonfly Doji

The Dragonfly Doji has a near-zero body (open and close at the same price) with a long lower wick occupying at least 85% of the candle range. It signals that sellers dominated the session initially, pushing price far below the open, before buyers completely recovered the loss. The psychological message is clear: sellers tried and failed decisively. At support levels, this is a high-confidence bullish reversal signal.

3. Gravestone Doji

The mirror image of the Dragonfly: a near-zero body with a long upper wick taking up at least 85% of range. Buyers pushed price aggressively higher before sellers reversed the entire move back to the open. At resistance levels, the Gravestone Doji is one of the stronger bearish reversal signals in single-candle analysis.

4. Doji

A Doji has a body smaller than 5% of range with wicks on both sides. It represents complete indecision — neither buyers nor sellers won the session. Dojis in trending conditions can signal exhaustion. In ranging conditions, they confirm the lack of directional conviction. They are most useful as a component of multi-candle patterns (Morning Star, Evening Star) than as standalone signals.

5. Spinning Top

Similar to the Doji but with a slightly larger body (up to 30% of range) and wicks on both sides. Like the Doji, it signals indecision and is most useful in context rather than isolation.

6 & 7. Hammer and Hanging Man

These two patterns are geometrically identical: a lower wick of at least 60% of range, a body between 10–35% of range, and an upper wick of no more than 10%. The difference is context. A Hammer appears after a downtrend and signals a potential bullish reversal. A Hanging Man appears after an uptrend and signals a potential bearish reversal. Same candle, opposite signals depending on where it appears.

8 & 9. Inverted Hammer and Shooting Star

The same context-dependent relationship applies here. Both have a long upper wick (>60% of range), a body between 10–35%, and a lower wick of no more than 10%. An Inverted Hammer after a downtrend signals potential bullish reversal. A Shooting Star after an uptrend signals potential bearish reversal.

10 & 11. Bullish and Bearish Marubozu

Marubozu candles have a body exceeding 90% of range with virtually no wicks. They represent the most decisive sessions possible — one side completely dominated from open to close without significant opposition. A Bullish Marubozu signals strong continuation or reversal momentum depending on context. A Bearish Marubozu carries the same weight in the opposite direction.

Two-Candle Patterns

Two-candle patterns require a specific relationship between consecutive candles. They are generally more reliable than single-candle patterns because they show how the market responded after the first candle closed.

12 & 13. Bullish and Bearish Engulfing

Engulfing patterns require the second candle’s body to completely engulf the first candle’s body by at least 110%. After a downtrend, a Bullish Engulfing (large bull candle swallowing a smaller bear candle) signals buyers have taken decisive control. After an uptrend, a Bearish Engulfing signals the opposite. The engulfing ratio requirement filters out weak formations where the second candle barely exceeds the first.

14 & 15. Bullish and Bearish Harami

The Harami is the opposite of Engulfing: the second candle’s body must be contained inside the first candle’s body, at no more than 50% of its size. A large bearish candle followed by a small bullish candle entirely within its range signals that the selling momentum has stalled. Traders watch for confirmation on the following candle before acting.

16 & 17. Tweezer Bottom and Top

Tweezer patterns occur when two consecutive candles share a matching low (Tweezer Bottom) or matching high (Tweezer Top) within a few pips tolerance. The matching extreme shows a price level where the market has tested and rejected in both candles — establishing a temporary support or resistance. At significant levels, Tweezers can mark precise turning points.

Three-Candle Patterns

Three-candle patterns provide the strongest signals in candlestick analysis because they show a progression over three sessions: the original trend, a period of indecision or transition, and confirmation of the reversal or continuation. Fewer false signals, but they form less frequently.

18. Morning Star

The Morning Star is a three-candle bullish reversal pattern. First candle: a large bearish candle (body >65% of range) confirming the downtrend. Second candle: a small-bodied indecision candle (body <30%) signaling the trend may be exhausting. Third candle: a large bullish candle closing more than 50% into the body of the first candle. The penetration requirement ensures the reversal has genuine momentum, not just a brief bounce.

19. Evening Star

The bearish counterpart of the Morning Star. Large bullish first candle, small indecision second candle, then a large bearish third candle closing more than 50% into the first candle’s body. One of the most reliable reversal patterns in technical analysis when it appears at significant resistance.

20. Three White Soldiers

Three consecutive bullish candles, each with a body exceeding 55% of range and an upper wick of no more than 15%. This pattern signals sustained buying pressure across three sessions — one of the stronger continuation signals after a breakout or reversal. The small upper wick requirement ensures buyers maintained control to near the close on each candle, without significant late-session selling.

21. Three Black Crows

Three consecutive bearish candles meeting the same body and wick criteria in the opposite direction. Signals sustained selling pressure and is particularly significant when it appears after a prolonged uptrend or failed breakout attempt.

22 & 23. Three Inside Up and Three Inside Down

These patterns begin with a Harami (two-candle indecision) and add a third candle that confirms the reversal direction. Three Inside Up: Bearish candle, bullish Harami candle inside it, then a third bullish candle closing above the first candle’s open. Three Inside Down: the bearish equivalent. The third candle confirmation makes these more reliable than the Harami alone.

How to Use These Patterns Effectively

Candlestick patterns work best when combined with these principles:

• Location matters more than the pattern itself. A perfect pin bar in the middle of a range is a weaker signal than an imperfect pin bar at a key support level. Always ask: where is this pattern forming relative to significant price levels?
• Use the ATR filter. Patterns forming on undersized candles are noise. A candle must be large enough relative to recent volatility to carry genuine momentum information.
• Volume confirms conviction. Patterns backed by above-average volume represent sessions where genuine market participation drove the move. Low-volume patterns are more likely to reverse.
• Higher timeframes carry more weight. A Bearish Engulfing on the daily chart is a more significant signal than the same pattern on a 5-minute chart, because it represents a full day of market activity rather than a few minutes.