Learn · Reading charts · 6 min read
Single-candle signals: hammer, shooting star and doji
Some single candles can hint that a move is running out of steam. They matter most after a clear move and near support or resistance.
Hammer (bullish pin bar)
BullishWhat it means: After a drop, sellers pushed price down hard, but buyers fought back and closed near the top. The long lower wick shows the low was rejected.
How traders use it: Wait for the next candle to close higher before buying. Many traders put the stop below the hammer's low.
Shooting star (bearish pin bar)
BearishWhat it means: After a rise, buyers pushed price up, but sellers slammed it back down. The long upper wick shows the high was rejected.
How traders use it: Wait for the next candle to close lower before selling. A common stop is above the shooting star's high.
Doji
Neutral / either wayWhat it means: Open and close are almost the same. Buyers and sellers were evenly matched, so the market is undecided.
How traders use it: On its own a doji means little. After a long move it can warn that momentum is fading. Wait for the next candle to show direction.
Patterns fail often. Treat them as clues, not guarantees, and always use a stop loss.
- Hammer: long lower wick after a drop (bullish).
- Shooting star: long upper wick after a rise (bearish).
- Doji: indecision. Wait for confirmation.
Test yourself: Bullish or Bearish? quiz →
For learning only, not financial advice. Trading on margin is high risk.