3 Most Essential Candlestick Patterns for Trading Analysis

1: Morning and Evening Star Patterns

Triple candlestick formations. Powerful trend reversals.

The Morning Star shows up when downtrends fade. First candle? Bearish. Second one's tiny. Then boom—a strong bullish third candle points everything up. The Evening Star? Kind of its mirror image. It appears at the peak. Bullish first, small middle, bearish third. Down we go.

2: Three White Soldiers and Black Crows

Three White Soldiers emerge as consecutive bullish candles after a downtrend. Strong reversal signal. It seems the 2025 backtests show this works really well in stocks. Forex results? Not as impressive. The pattern needs specific structure—second candle bigger than first, third at least matching the second.

The bearish twin is Three Black Crows. Three bearish candles in a row after prices climbed. Downward shift coming. Same rules apply but flipped. Second candle beats the first in size. Third one matches or exceeds the second. Simple but effective.

3: Three Inside Up and Inside Down

Three Inside Up shows at downtrend bottoms. Not entirely clear sometimes, but worth watching. Starts with a long bearish candle. Then a bullish one reaching at least halfway up the first. The third? It closes above the first candle's high. That's your confirmation.

Three Inside Down works after uptrends. Kind of surprising how symmetrical these patterns are. Long bullish candle first. Bearish second reaching midway. Third candle closes below the first one's low. Downward momentum confirmed.

For 2025 trading, wait for that third candle to close before jumping in. Stop-losses? Place them above the first candle's high for bearish setups. Below for bullish ones. Exit at recent support/resistance zones.