{"format":"alysly-page/1","url":"https://alysly.com/learn/candlestick-reversal-patterns/","json":"https://alysly.com/json/learn/candlestick-reversal-patterns/index.json","lang":"en-US","title":"Candlestick Reversal Patterns: Hammer, Engulfing, Star & Co.","description":"Hammer, shooting star, engulfing, harami, morning and evening star, piercing line, dark cloud cover and tweezers – construction, meaning and preconditions.","published":"2026-08-02T15:41:33+02:00","modified":"2026-11-01T18:26:04+01:00","alternates":[{"lang":"de-DE","url":"https://alysly.com/de/lernen/kerzen-umkehrmuster/","json":"https://alysly.com/json/de/lernen/kerzen-umkehrmuster/index.json"}],"about":"Machine-readable version of the page at url. It contains the text, tables and key figures published there, but not the interactive charts and tools.","breadcrumb":[{"name":"Investing & Trading Basics","url":"https://alysly.com/learn/"},{"name":"Level 2","url":"https://alysly.com/learn/#level-2"},{"name":"Candlestick Reversal Patterns","url":"https://alysly.com/learn/candlestick-reversal-patterns/"}],"content":[{"type":"paragraph","text":"Level 2 Patterns & Indicators · Part 1/9"},{"type":"heading","level":1,"text":"Candlestick Reversal Patterns"},{"type":"paragraph","text":"By Alexander Bock, founder and data analyst","links":[{"text":"Alexander Bock","href":"https://alysly.com/about/"}]},{"type":"paragraph","text":"Reversal patterns made of one to three candles are the best-known part of Japanese charting. They all share one requirement: a trend has to come first. A “reversal pattern” inside a sideways range reverses nothing."},{"type":"heading","level":2,"id":"single-candle-patterns","text":"Single-Candle Patterns"},{"type":"heading","level":3,"id":"hammer","text":"Hammer"},{"type":"image","src":"https://alysly.com/img/ta/hammer.806f83ca9bfdb9d9e48cfd087dcce53567a9e1a88263c06922cc6eab87a5e0f0.webp","alt":"Hammer candle at the end of a downtrend: small body on top, long lower wick"},{"type":"paragraph","text":"(1) A hammer forms when price falls hard during the session but the low gets bought back — the close returns near the open. The long lower wick is the message: buyers stepped in down there. Without a preceding downtrend the very same candle means nothing."},{"type":"paragraph","text":"A small body at the top of the range, a long lower wick, almost no upper wick. As a rule of thumb, the lower wick is at least twice as long as the body. The color of the body is secondary."},{"type":"paragraph","text":"The message is not in the name but in the sequence: the price fell a long way and was bought back completely. The same shape after a rally is called a hanging man and is read as a warning. Identical candle, different meaning – purely because of the context."},{"type":"heading","level":3,"id":"shooting-star","text":"Shooting Star"},{"type":"image","src":"https://alysly.com/img/ta/shooting-star.704ef08cfc6b976f1061d4e1a401b044a8790ce8462b0842d8a6c7479768475a.webp","alt":"Shooting star at the end of an uptrend: small body at the bottom, long upper wick"},{"type":"paragraph","text":"(1) The mirror image of the hammer: price runs far up during the session, then gives it all back. The long upper wick shows buyers found no takers up there. Only meaningful after a rally."},{"type":"paragraph","text":"The mirror image after a rally: a small body at the bottom, a long upper wick. The market tested higher prices and rejected them. After a downtrend the same shape is called an inverted hammer."},{"type":"heading","level":2,"id":"two-candle-patterns","text":"Two-Candle Patterns"},{"type":"heading","level":3,"id":"engulfing","text":"Engulfing"},{"type":"image","src":"https://alysly.com/img/ta/bullish-engulfing.331b01bf14a9fb3290a88ebdecc1c26ec9c7d025358e81807d8f30cfdae400d6.webp","alt":"Bullish engulfing: a large green candle swallows the body of the preceding red candle"},{"type":"paragraph","text":"(1) The small red candle continues the downtrend. (2) The next green candle opens lower and closes above the previous open — its body fully engulfs the one before. In one sentence: a whole day of selling was taken back in a single session."},{"type":"paragraph","text":"The body of the second candle covers the body of the first one completely and closes in the opposite direction. Only the bodies count, not the wicks."},{"type":"image","src":"https://alysly.com/img/ta/bearish-engulfing.946223c74f967763af976eca3c0a32e5123ecc418f266664432a4a4678a4d0df.webp","alt":"Bearish engulfing: a large red candle swallows the body of the preceding green candle"},{"type":"paragraph","text":"(1) The small green candle extends the rally. (2) The red candle opens higher and closes below the previous open. The larger the engulfing body relative to its neighbors, the cleaner the break — an engulfing built from two tiny candles is barely more than noise."},{"type":"paragraph","text":"The larger the engulfing candle is compared with its neighbors, the clearer the statement. Two tiny candles meet the definition on paper but carry no information – a good test of whether you apply patterns mechanically or with understanding."},{"type":"heading","level":3,"id":"harami","text":"Harami"},{"type":"image","src":"https://alysly.com/img/ta/harami.74da7c74d7d206c4d55489a5ae55d9531d7edf595db055e0fc0cd5037ec3b0d6.webp","alt":"Bearish harami: a small candle sits entirely inside the body of the large preceding candle"},{"type":"paragraph","text":"(1) A large candle in the direction of the trend. (2) The next candle stays entirely within the previous body. Harami is not a reversal signal but a stalling signal: the move stopped gaining ground. What happens next is decided by the following candle."},{"type":"paragraph","text":"The opposite case: the second candle sits completely inside the body of the first one. A harami is not a reversal signal but a stalling signal – the move stopped gaining ground. What happens next is decided by the following candle, not by the pattern."},{"type":"heading","level":3,"id":"piercing-line-and-dark-cloud-cover","text":"Piercing Line and Dark Cloud Cover"},{"type":"image","src":"https://alysly.com/img/ta/piercing-line.00f34f589ceee26f32d74ac9d0a08783721cceebef184c5ff8957df1b098792f.webp","alt":"Piercing line: a green candle opens below the prior low and closes above the midpoint of the red body"},{"type":"paragraph","text":"(1) A clear red candle. (2) The next one opens even lower — the downtrend looks confirmed — but closes above the midpoint of the red body (dashed line). Opening weakness was not just recovered but overcompensated. A close below the midpoint is not a piercing line."},{"type":"paragraph","text":"The second candle opens beyond the previous extreme and closes above (or below) the midpoint of the previous body."},{"type":"image","src":"https://alysly.com/img/ta/dark-cloud-cover.ec3899f0f48e51f525c1c80bf8851c4f92b377d08c00ef5eedd48970ab174110.webp","alt":"Dark cloud cover: a red candle opens above the prior high and closes below the midpoint of the green body"},{"type":"paragraph","text":"(1) A clear green candle. (2) The next opens higher, turns, and closes below the midpoint of the green body (dashed line). Anyone who bought the opening high is underwater by the close — that, not the shape, is what makes the pattern relevant."},{"type":"paragraph","text":"The midpoint is the real condition. A candle that pushes only slightly into the previous body is not a pattern but an ordinary pullback."},{"type":"heading","level":3,"id":"tweezers","text":"Tweezers"},{"type":"image","src":"https://alysly.com/img/ta/tweezer-bottom.d2525e789c7a26260c3d85b8b4c404a42b4352e740b01b624d859c4cc2189e03.webp","alt":"Tweezer bottom: two consecutive candles with nearly identical lows"},{"type":"paragraph","text":"(1) and (2) mark two lows at practically the same price. The pattern's value is not its shape but the precise level it hands you: below the shared low the idea is refuted. A pattern that supplies its own stop is more workable than one that does not."},{"type":"paragraph","text":"Two candles with almost identical lows (tweezer bottom) or highs (tweezer top). Their practical value lies less in the prediction than in the level. The shared extreme is a precise boundary, and once price passes it, the idea is wrong. This is a pattern that supplies its own stop."},{"type":"heading","level":2,"id":"three-candle-patterns","text":"Three-Candle Patterns"},{"type":"image","src":"https://alysly.com/img/ta/morning-star.01f127201942d22d2440cd7704e75e98ec08ddfd595038ce85555ed5e2b92d0a.webp","alt":"Morning star: large red candle, small gapped candle, large green candle"},{"type":"paragraph","text":"Three candles tell a sequence: (1) selling pressure, (2) a stall at a lower level — the small body shows neither side is gaining ground, (3) recapture that reaches deep into the first body. The further the third candle closes into the first, the more complete the change of tone."},{"type":"paragraph","text":"The morning star starts with a large down candle and a small candle at a lower level. A large up candle then closes deep inside the first body. The deeper it reaches, the more complete the change of mood."},{"type":"image","src":"https://alysly.com/img/ta/evening-star.61ba59c4eca324890ec53a77c1405029d8fa4dc09e125dd254ccb67452748fd8.webp","alt":"Evening star: large green candle, small gapped candle, large red candle"},{"type":"paragraph","text":"The counterpart to the morning star at the end of a rally: (1) buying pressure, (2) a small body at a higher level — the advance no longer carries, (3) a red candle that unwinds most of the first candle's gain."},{"type":"paragraph","text":"The evening star is its counterpart at the end of a rally."},{"type":"paragraph","text":"The classic definition requires gaps between the candles. In markets that trade continuously – crypto, FX – those hardly exist. If you find the pattern there anyway, the definition has quietly been loosened. That is allowed, but it is then a different pattern from the one that was studied."},{"type":"heading","level":2,"id":"what-applies-to-all-of-them","text":"What Applies to All of Them"},{"type":"table","caption":"Candlestick Reversal Patterns","columns":["Condition","Why"],"rows":[["A trend has to come first","Without a trend there is nothing to reverse"],["Size relative to the surroundings","A pattern of below-average candles is noise"],["Position at a known zone","The same pattern counts for more at the edge of a range than in the middle of nowhere"],["Confirmation by the next candle","The pattern describes the past, not the next period"]]},{"type":"paragraph","text":"And the most important limit: candlestick patterns are short-term. They describe the balance of one to three periods. Turning them into a forecast for the coming weeks stretches them far beyond their range."},{"type":"heading","level":2,"id":"next","text":"Next"},{"type":"paragraph","text":"The next article covers patterns that signal continuation instead of reversal."},{"type":"list","ordered":false,"items":[{"text":"Back Investing & Trading Basics","href":"https://alysly.com/learn/"},{"text":"Next Continuation Patterns and the Doji Family","href":"https://alysly.com/learn/candlestick-continuation-patterns/"}]},{"type":"heading","level":2,"text":"Indices"},{"type":"table","caption":"Indices, performance over the selected period","columns":["Index","1M"],"rows":[[{"text":"Dow Jones","href":"https://alysly.com/markets/indices/dow-jones/"},{"text":"+1.0%","data":{"m1":"+1.0%","m3":"-4.3%","m6":"+4.9%","ytd":"+7.6%","max":"+30.0%"}}],[{"text":"S&P 500","href":"https://alysly.com/markets/indices/sp500/"},{"text":"-2.6%","data":{"m1":"-2.6%","m3":"-2.2%","m6":"+4.2%","ytd":"+10.6%","max":"+35.6%"}}],[{"text":"MSCI World","href":"https://alysly.com/markets/indices/msci-world/"},{"text":"-2.0%","data":{"m1":"-2.0%","m3":"-2.4%","m6":"+3.7%","ytd":"+10.0%","max":"+35.0%"}}],[{"text":"MSCI ACWI","href":"https://alysly.com/markets/indices/msci-acwi/"},{"text":"-3.3%","data":{"m1":"-3.3%","m3":"-3.0%","m6":"+2.3%","ytd":"+10.2%","max":"+41.5%"}}]]},{"type":"heading","level":2,"text":"ETFs"},{"type":"table","caption":"ETFs, performance over the selected period","columns":["Fund","1M"],"rows":[[{"text":"SPDR S&P 500 ETF Trust SPY","links":[{"text":"SPDR S&P 500 ETF Trust","href":"https://alysly.com/markets/etfs/us/spy/"}]},{"text":"-2.6%","data":{"m1":"-2.6%","m3":"-2.2%","m6":"+4.2%","ytd":"+10.6%","max":"+35.6%"}}],[{"text":"Vanguard S&P 500 ETF VOO","links":[{"text":"Vanguard S&P 500 ETF","href":"https://alysly.com/markets/etfs/us/voo/"}]},{"text":"-2.6%","data":{"m1":"-2.6%","m3":"-2.2%","m6":"+4.2%","ytd":"+10.6%","max":"+34.1%"}}],[{"text":"iShares Core MSCI World UCITS ETF USD (Acc) EUNL","links":[{"text":"iShares Core MSCI World UCITS ETF USD (Acc)","href":"https://alysly.com/markets/etfs/ishares-core-msci-world-ucits-etf-usd-acc/"}]},{"text":"-2.0%","data":{"m1":"-2.0%","m3":"-2.3%","m6":"+4.3%","ytd":"+10.6%","max":"+487.5%"}}],[{"text":"Xtrackers MSCI Emerging Markets UCITS ETF 1c XMME","links":[{"text":"Xtrackers MSCI Emerging Markets UCITS ETF 1c","href":"https://alysly.com/markets/etfs/xtrackers-msci-emerging-markets-ucits-etf-1c/"}]},{"text":"-9.4%","data":{"m1":"-9.4%","m3":"-4.1%","m6":"-3.3%","ytd":"+14.0%","max":"+93.0%"}}]]},{"type":"heading","level":2,"text":"Stocks"},{"type":"table","caption":"Stocks, performance over the selected period","columns":["Stock","1M"],"rows":[[{"text":"NVIDIA Corporation NVDA","links":[{"text":"NVIDIA Corporation","href":"https://alysly.com/markets/stocks/nvidia-corporation/"},{"text":"United States","href":"https://alysly.com/markets/stocks/browse/?country=United%20States"}]},{"text":"-13.5%","data":{"m1":"-13.5%","m3":"-2.5%","m6":"+5.2%","ytd":"+10.8%","max":"+62.2%"}}],[{"text":"Apple Inc. AAPL","links":[{"text":"Apple Inc.","href":"https://alysly.com/markets/stocks/apple-inc/"},{"text":"United States","href":"https://alysly.com/markets/stocks/browse/?country=United%20States"}]},{"text":"-0.3%","data":{"m1":"-0.3%","m3":"+7.3%","m6":"+16.8%","ytd":"+22.1%","max":"+45.8%"}}],[{"text":"Tesla Inc. TSLA","links":[{"text":"Tesla Inc.","href":"https://alysly.com/markets/stocks/tesla-inc/"},{"text":"United States","href":"https://alysly.com/markets/stocks/browse/?country=United%20States"}]},{"text":"+5.2%","data":{"m1":"+5.2%","m3":"+21.7%","m6":"+2.3%","ytd":"-11.4%","max":"+65.3%"}}]]},{"type":"paragraph","text":"Data note 1","href":"#dn-1"},{"type":"heading","level":2,"text":"More Studies"},{"type":"list","ordered":false,"items":[{"text":"Jul 21, 2026 Collectibles ×5.4 for the same cards, matched-model index, Mar 2022 – Aug 2026 Is the Pokémon Card Market in a Bubble? 4,159 Sales Analyzed Prices for PSA-graded cards multiplied. Measured on the same cards they rose 438%, while the raw median shows 786% because pricier cards came up for sale later.","href":"https://alysly.com/analysis/pokemon-card-market-bubble/"},{"text":"May 19, 2026 Crypto 45.6% Bitcoin’s annualized volatility, Jul 2024 – Sep 2026 Bitcoin in Investment Portfolios: The Real Numbers Bitcoin is calmer than it was and still about three times as volatile as the stock market. It moves with stocks, not with gold.","href":"https://alysly.com/analysis/bitcoin-investment-portfolios/"},{"text":"Mar 17, 2026 Wealth €1.2m needed for €3,000 a month indefinitely at a 3% real return Living Off Your Returns: What It Really Takes The capital you need is arithmetic. The return you assume is a guess, and it can triple the answer.","href":"https://alysly.com/analysis/living-off-returns/"}]},{"type":"paragraph","text":"View all studies","href":"https://alysly.com/analysis/#studies"},{"type":"heading","level":2,"text":"Learn"},{"type":"list","ordered":false,"items":[{"text":"Continuation Patterns and the Doji Family Doji, marubozu, soldiers and crows – indecision or continuation.","href":"https://alysly.com/learn/candlestick-continuation-patterns/"},{"text":"Reversal Chart Patterns H&S, double top, double bottom, rounding bottom – and what their targets are worth.","href":"https://alysly.com/learn/reversal-chart-patterns/"}]},{"type":"paragraph","text":"Course overview","href":"https://alysly.com/learn/"},{"type":"paragraph","text":"Updated Nov 1, 2026 · Content and figures checked Oct 19, 2026"},{"type":"heading","level":2,"id":"note-legend-h","text":"Data Notes"},{"type":"paragraph","text":"All calculations run automatically and are not investment advice."},{"type":"list","ordered":true,"items":[{"id":"dn-1","text":"Returns computed automatically from the price series, excluding dividends, taxes and costs."}]},{"type":"paragraph","text":"Data and methodology: Alysly · Responsible for content: Alexander Bock","links":[{"text":"Alysly","href":"https://alysly.com/methodology/"},{"text":"Alexander Bock","href":"https://alysly.com/about/"}]},{"type":"paragraph","text":"View all data notes","href":"https://alysly.com/notes/"}],"structured_data":[{"@context":"https://schema.org","@graph":[{"@type":"Organization","@id":"https://alysly.com/#org","name":"Alysly","url":"https://alysly.com/","logo":{"@type":"ImageObject","url":"https://alysly.com/img/icon-512.png","width":512,"height":512},"description":"Data-driven insights, transparent analysis and powerful tools for long-term investors.","email":"mail@alysly.com","contactPoint":{"@type":"ContactPoint","contactType":"customer 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Not investment advice. All data without guarantee. Financial information is analyzed and presented partly with AI assistance."}