All lessons
Candlestick patterns in context
A memorable candle name is easy to learn. The harder part is asking where it appeared and what would disprove the idea.
Describe a candle pattern without treating its name as a prediction.
A rejection candle has a relatively long wick: price visited an area but closed away from it. An engulfing body covers the preceding candle's body. Define the exact body and wick rules before collecting examples.
Location matters. A bullish-looking candle near a previously marked support zone describes a different situation from the same candle in the middle of a range. Record the preceding trend, timeframe and spread.
A pattern is an observation, not an entry order. Write what additional event your hypothesis requires, where it becomes invalid and how you will measure failures. Use completed candles; an unfinished candle can change shape.
Let’s use numbers · hypothetical example
Hypothetically EUR/USD opens at 1.0800, falls to 1.0770 and closes at 1.0795. The lower wick shows rejection within that hour; it does not guarantee the next hour rises.
Keep in mind
Repeated patterns can fail, especially around news. A wick alone cannot identify who traded.
Your turn
Mark ten completed rejection candles, including failures, and compare their locations.
A quick check before we move on
What does a long lower wick establish?
- Price traded lower and closed away from that low
- A certain rise tomorrow
- Proof that a bank bought
Check answer
Price traded lower and closed away from that low The candle summarizes recorded prices. Future direction and trader identity require evidence beyond its shape.
Sources and further reading
Content reviewed: 29 October 2026
Educational material with hypothetical examples. Trading can cause substantial losses. A course, pattern, stop order or past result cannot guarantee a profit or limit every loss. Practise in simulation and check current rules and product terms in your jurisdiction.
