| Updated: October 23, 2025Patterns including one candlestick. Doji candlesticks
This lesson will cover the following
- What are these patterns?
- What information do they convey?
- What is a doji and what can it tell us?
Patterns consisting of a single candlestick have three variations, each with bullish and bearish forms. They are as follows:
1. Hammer (bullish version) and Hanging Man (bearish version),
2. Inverted Hammer (bullish version) and Shooting Star (bearish version),
3. Yo Sen (bullish version) and In Sen (bearish version).
Hammer and Hanging Man formations
These formations appear almost identical on the price chart, but they play different roles. They both have very long lower wicks, small bodies and short or absent upper wicks.
The Hammer represents a bullish reversal formation – it develops after prices have been in a down-trend. It usually appears at support levels. It suggests that price action may have reached a floor and could be about to rise. The appearance of a Hammer gives traders an opportunity to open a long position, but that does not mean they should buy immediately. As with any other technical analysis tool, it should not be used in isolation. Traders should look for confirmation that price action is reversing upwards. This is usually provided by a green candle that closes above the open price (or high) of the candle preceding the Hammer.
The Hammer formation can be recognised when the following features are present:
1. It has a long lower wick, at least three times the length of the body
2. It has a short or absent upper wick
3. The body appears at the upper end of the candle
4. The colour of the candlestick’s body is not that relevant, but traders prefer a green Hammer.
The Hanging Man represents a bearish reversal formation – it forms after prices have been in an up-trend. It usually appears at resistance levels. It suggests that price action may have reached a peak and could be about to fall. The appearance of a Hanging Man provides traders with the opportunity to open a short position. Again, confirmation is needed that price action is reversing downwards. This is usually a red candle that closes below the open price (or low) of the candle preceding the Hanging Man.
The Hanging Man formation can be recognised when the following features are present:
1. It has a long lower wick, at least three times the length of the body
2. It has a short or absent upper wick
3. The body appears at the upper end of the candle
4. The colour of the candlestick’s body is not that relevant, but traders prefer a red Hanging Man.
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Inverted Hammer and Shooting Star formations
These formations again appear almost identical on the price chart, but are used in a different context. They both have very long upper wicks, small bodies and short or absent lower wicks.
The Inverted Hammer corresponds to the Hanging Man pattern, but it forms after prices have been in a down-trend. It usually appears at support levels. It suggests that price action may have reached a floor and could be about to rise. The appearance of an Inverted Hammer gives traders an opportunity to open a long position. However, traders should not buy immediately; they need confirmation that price action is indeed reversing upwards. This is usually a green candle that closes above the open price (or high) of the candle preceding the Inverted Hammer.
Sometimes an Inverted Hammer may form close to an ordinary Hammer, which can confirm that a given support level is indeed strong.
The Inverted Hammer formation can be recognised when the following features are present:
1. It has a long upper wick, at least three times the length of the body
2. It has a short or absent lower wick
3. The body appears at the lower end of the candle
4. The colour of the candlestick’s body is not that relevant, but traders prefer a green Inverted Hammer.
The Shooting Star formation corresponds to the Hammer pattern, but it forms after prices have been in an up-trend. It usually appears at resistance levels. It suggests that price action may have reached a peak and could be about to fall. The appearance of a Shooting Star provides traders with the opportunity to open a short position. However, they should not sell immediately; they need confirmation that price action is indeed reversing downwards. This is usually a red candle that closes below the open price (or low) of the candle preceding the Shooting Star.
The Shooting Star formation can be recognised when the following features are present:
1. It has a long upper wick, at least three times the length of the body
2. It has a short or absent lower wick
3. The body appears at the lower end of the candle
4. The colour of the candlestick’s body is not that relevant, but traders prefer a red Shooting Star.
Yo Sen and In Sen formations
These candlestick formations can be recognised by their large bodies and short or no shadows.
The Yo Sen candlestick (bullish) represents a single bullish candle with a large (full) body and short or no shadows (wicks). When it appears on the price chart, it signals that it is appropriate for a trader to enter a long position.
The In Sen candlestick (bearish) represents a single bearish candle with a large (full) body and short or no shadows (wicks). When it appears on the price chart, it signals that it is appropriate for a trader to enter a short position.
Doji candlesticks
These candlesticks usually form when a given tradable instrument has virtually equal opening and closing prices. This causes the doji to have a much smaller body compared with ordinary candlesticks.
A doji indicates that there is a relative balance between long-positioned and short-positioned players in the market, preventing price action from moving decisively in either direction.
Doji candlesticks are useful to traders because they help identify whether a trend is losing strength and when prices may change direction. This enables traders to catch and ride a trend just as it begins, or exit a trend before it ends. Patterns based on doji candlesticks provide reliable signals within trending markets. In trading ranges, however, signals are less reliable because market sentiment has no distinct direction and movement is limited, which makes it significantly harder to determine whether these signals should be acted upon.
Doji types
Four different types of doji candlestick may appear on a price chart: star doji, long-legged doji, dragonfly doji and gravestone doji. The main difference between them lies in the length and position of their wicks.
The star doji, also known as the standard doji, has short upper and lower wicks of almost identical length. This doji forms when the candle opens and closes at exactly the same price while price has moved in a tight range. It signals that traders remained indecisive during the respective period (depending on the time frame used).
The long-legged doji is characterised by longer upper and lower shadows, indicating that price has travelled in a considerably wider range. It signals once again that buyers and sellers are battling each other, but this time both sides are more active. When this doji appears on the chart, a volatile price move is usually expected shortly.
The dragonfly doji can be recognised by its long lower shadow, while the candle opens and closes at virtually the same level, at the high end of the trading range. This doji indicates that sellers dragged prices lower until losing control due to increased buying pressure. Buyers become more active and push the price back up to the opening level. No upper wick is visible, implying that sellers remain cautious and buyers do not yet have enough strength to push the price above the opening level. The dragonfly doji is considered a bullish signal (a down-trend may be losing strength and prices may reverse upwards).
The gravestone doji has a long upper shadow, while the candle opens and closes at virtually the same level, at the low end of the trading range. This doji indicates that buyers pushed prices higher until losing control due to increased selling pressure. Sellers become more active and push the price back down to the opening level. No lower wick is visible, implying that buyers still provide support while sellers cannot yet break the support level. The gravestone doji is considered a bearish signal (an up-trend may be losing strength and prices may reverse downwards).