Types of Candlestick Shapes

Definition

Candlestick shape types are classifications based on body size and wick length. These shapes are used to read momentum, market indecision, and potential reversals.

Simple Explanation (Analogy)

Think of each candle as body language. A long body = confident statement. A doji = indecision. A long lower wick = fell but recovered. A long upper wick = rose but got rejected.

Indonesian Stock Example

In liquid stocks like BBRI or TLKM, you'll often see this sequence: after a decline, a hammer appears at support followed by a confirming green candle. At resistance, a shooting star often appears before a short pullback.

Candle & Wave Visuals

How to Use

• Start with 8 core shapes: Bullish Marubozu, Bearish Marubozu, Doji, Hammer, Inverted Hammer, Shooting Star, Hanging Man, and Spinning Top.
• Always check location: bullish shapes are more valid at support or late downtrends; bearish shapes are more valid at resistance or late uptrends.
• Wait for the next confirmation candle. Candle shapes without confirmation often create false signals.
• Combine with MA10/MA30 and volume: strongest signals appear when reversal shapes form near key MAs with above-average volume.
• Use risk management: scale entries, place stop-loss below/above the extreme wick, and target at least 1:2 risk-reward.

Common Mistakes

• Assuming every hammer means price will rise. A hammer in the middle of sideways action often has no edge.
• Entering trades from one candle only without checking broader trend and volume.
• Placing stop-loss too tight inside wick noise, causing frequent premature stop-outs.
• Memorizing too many pattern names without understanding support-resistance context.
• Ignoring timeframe. Shapes on larger timeframes (H4/D1) are usually more reliable than M1/M5.

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After understanding this concept, apply it in tools so decisions become more objective and measurable.

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