Single-candle patterns

Some candles are worth noticing on their own because their shape tells a clear story about a single period. This lesson covers four of the most widely used. None of them predicts the future by itself; each is a clue that needs context, which you will look at in the final lesson.

Doji

A doji is a candle where the open and close are equal or almost equal, so the body is a thin line. The wicks can be any length.

What it suggests: buyers and sellers ended the period roughly level. It signals indecision. After a strong move, a doji can hint that momentum is fading. In a quiet, sideways market, dojis are common and usually mean very little.

There are variations you may see named:

• A long-legged doji has long wicks on both sides: a lot of movement, but no winner.
• A dragonfly doji has a long lower wick and almost no upper wick: sellers pushed down but the price recovered to the open.
• A gravestone doji is the opposite: a long upper wick and almost no lower wick.

How thin is "almost equal"? There is no official rule. A practical guide is a body that is a very small fraction of the candle's range, say 10% or less.

Hammer

A hammer has a small body near the top of its range, a long lower wick and little or no upper wick. A common guide is a lower wick at least twice the length of the body.

What it suggests: sellers drove the price well down during the period, but buyers pushed it back up before the close. It is only called a hammer when it appears after a decline, where it hints at a possible bullish reversal. The body can be either colour, although a bullish body is often treated as slightly stronger.

Worked example: is it a hammer?

After a fall, EUR/USD prints this hourly candle (example prices):

• Body: 1.0940 − 1.0930 = 10 pips (bullish)
• Lower wick: 1.0930 − 1.0890 = 40 pips
• Upper wick: 1.0945 − 1.0940 = 5 pips
• Range: 1.0945 − 1.0890 = 55 pips (check: 10 + 40 + 5 = 55)

The lower wick is four times the body, comfortably more than twice, and the upper wick is short. After a decline, this qualifies as a hammer. Price was rejected 40 pips below the open.

The same shape appearing after a rise is called a hanging man, and is read as a possible warning that buying is weakening.

Shooting star

A shooting star is the mirror image of a hammer: a small body near the bottom of the range, a long upper wick at least twice the body, and little or no lower wick. It counts as a shooting star only after a rise.

What it suggests: buyers pushed the price up strongly, but sellers drove it back down before the close, a possible sign of bearish reversal.

Worked example

After a rally, an hourly candle shows: open 1.1060, high 1.1100, low 1.1045, close 1.1050 (example prices).

• Body: 1.1060 − 1.1050 = 10 pips (bearish)
• Upper wick: 1.1100 − 1.1060 = 40 pips
• Lower wick: 1.1050 − 1.1045 = 5 pips
• Range: 1.1100 − 1.1045 = 55 pips (check: 10 + 40 + 5 = 55)

The upper wick is four times the body, so after a rally this is a shooting star. The same shape after a decline is called an inverted hammer.

Marubozu

A marubozu (a Japanese term often translated as "bald" or "close-cropped") is a candle with a large body and no wicks, or wicks so small they barely register.

• A bullish marubozu opens at or near its low and closes at or near its high.
• A bearish marubozu opens at or near its high and closes at or near its low.

What it suggests: one side was in control from the first moment of the period to the last. It is a sign of strong momentum rather than reversal. A bullish marubozu breaking out of a range, for example, shows conviction behind the move. After a long, stretched trend, though, it can also mark a final burst of enthusiasm.

Summary table

Key takeaways

• A doji shows indecision; its meaning depends heavily on what came before it.
• A hammer and a shooting star are defined by a long rejection wick at least twice the body, and by where they appear.
• The same shape can have a different name and meaning depending on the preceding trend.
• A marubozu shows one-sided control and signals momentum rather than reversal.