SERIES 02 — Price Action Library

Reversal
Candlestick.

6 reversal candlestick patterns Smart Money uses every day — easy to spot at a glance, with the confirmation rules that keep you safe

1 May 2026 14 min read Beginner → Intermediate 6 patterns

"A single candle
tells an entire chapter of the market."

— Power of Price
PATTERN · ONE-CANDLE REVERSAL 01

Pin Bar.

A Pin Bar (or "Pinocchio Bar") is a candle with a long wick and a small body at the opposite end — telling us price was rejected sharply from that level. It's the most powerful one-candle reversal signal in price action.

HAMMER
Bullish · Hammer
Hammer Pin Bar
Lower wick 2-3× the body · forms at the end of a downtrend · means buyers are stepping in at the lows
  • Lower wick ≥ 2× body length
  • Body sits in upper half of candle (close near high)
  • Forms at swing low or demand zone
  • Confirmed by next candle closing higher
SHOOTING STAR
Bearish · Shooting Star
Shooting Star
Upper wick 2-3× the body · forms at the end of an uptrend · means sellers are stepping in at the highs
  • Upper wick ≥ 2× body length
  • Body sits in lower half of candle (close near low)
  • Forms at swing high or supply zone
  • Confirmed by next candle closing lower

The safest Pin Bars form at key levels (S/R, supply/demand) — pin bars in the middle of a range without context are usually noise.

PATTERN · TWO-CANDLE REVERSAL 02

Engulfing.

A new candle swallows the entire body of the previous one — it's the clearest momentum shift signal on the chart, because the opposite side has just taken full control.

ENGULF
Bullish Engulfing
Bullish Engulf
A large green candle swallows the prior red body · opens lower, closes higher than both
  • Green candle's open ≤ prior red close
  • Green candle's close ≥ prior red open
  • Above-average volume on the green candle
  • Forms at end of downtrend · near swing low
ENGULF
Bearish Engulfing
Bearish Engulf
A large red candle swallows the prior green body · opens higher, closes lower than both
  • Red candle's open ≥ prior green close
  • Red candle's close ≤ prior green open
  • Above-average volume on the red candle
  • Forms at end of uptrend · near swing high
Pro tip: A truly powerful engulfing has a thin wick and large body — if the wick is as long as the body, hesitation is still present and reliability drops.
PATTERN · INDECISION 03

Doji
& Spinning Top.

When open ≈ close, the market is telling you it's undecided — that's the Doji or Spinning Top. By itself it's not a reversal, but spotted at an extreme after a long trend, it often marks the turning point.

Standard Long-Legged
Neutral · Indecision
Doji
Almost no body (open = close) · means buyers and sellers are balanced — watch for direction change
  • Body height ≤ 5% of total wick range
  • Wicks fairly equal on both sides
  • Always read context (trend / level)
  • Wait for next-candle confirmation before trading
Dragonfly ↑ Gravestone ↓
Reversal Variants
Special Doji
Dragonfly (T) at swing low = bullish · Gravestone (⊤) at swing high = bearish
  • Wick exists only on one side
  • Open = Close = at the opposite extreme
  • Only meaningful at key levels
  • Confluence with S/R adds weight
PATTERN · THREE-CANDLE REVERSAL 04

Morning & Evening
Star.

A 3-candle pattern — large candle in the prior trend direction → small/Doji in the middle (decision pause) → large opposite candle for confirmation. This is the highest-win-rate pattern in the candlestick family.

STAR
Bullish · Morning Star
Morning Star
Forms at end of downtrend · 3-candle pattern Smart Money loves · wait for all three before trading
  • Candle 1: large bearish (≥ 70% body ratio)
  • Candle 2: small body (gap down preferred)
  • Candle 3: large bullish closing ≥ 50% into candle 1
  • Forms at demand zone or swing low
STAR
Bearish · Evening Star
Evening Star
Mirror of Morning Star · forms at end of uptrend · classic pattern that works across all markets
  • Candle 1: large bullish
  • Candle 2: small body (gap up preferred)
  • Candle 3: large bearish closing ≥ 50% into candle 1
  • Forms at supply zone or swing high
74%Historical win rate
3candlesConfirmation needed
2.5×Average risk-reward
PATTERN · TWIN REJECTION 05

Tweezer
Top & Bottom.

Two side-by-side candles with almost identical highs or lows — like "tweezers" pinching price at that level. It tells you the level matters: price tested it twice and held both times.

SAME LOW
Bullish · Tweezer Bottom
Tweezer Bottom
Two candles bottoming at the same level · sellers tested and failed twice in a row
  • Both lows at same level (within 1-2 pips)
  • Candle 1: bearish · Candle 2: bullish
  • Works best at demand zones
  • Confirmed when price breaks the second candle's high
SAME HIGH
Bearish · Tweezer Top
Tweezer Top
Two candles topping at the same level · buyers tested and failed twice in a row
  • Both highs at same level
  • Candle 1: bullish · Candle 2: bearish
  • Works best at supply zones
  • Confirmed when price breaks the second candle's low
MASTERY · CONFLUENCE 06

Combining
Patterns.

Single patterns can work, but stacking multiple patterns + structure at the same spot is what separates pros from beginners — this stack is called confluence.

Confluence Stack — 5 Layers You Want
  • Structure: at swing high/low of the trend
  • Zone: inside Supply / Demand / Order Block
  • Pattern: 1-2 reversal candles back-to-back
  • Volume: spike at the rejection point
  • Higher Timeframe: alignment with the bigger TF
Warning: Standalone patterns mid-trend (no structural context) have a win rate below 40% — never trade on a pattern alone.
1
Identify zone
Find supply/demand zones on a higher timeframe first
2
Wait for tap
Wait for price to enter the zone · don't pre-trade
3
Spot pattern
Look for a reversal pattern forming inside the zone
4
Enter on confirmation
Wait for confirmation candle · SL beyond wick · TP at RR ≥ 1:2
CLOSING — TRADER'S CREED

"Patterns are the words of the market.
Context is their meaning."

Power of Price · Price Action Library