Candlestick Patterns

A bullish engulfing is a two-candle signal: a down candle followed by an up candle whose body completely covers it. It marks a session that opened weak and closed strong — a shift in control. Its meaning depends almost entirely on where it forms.

A hammer is a single candle with a long lower wick, a small body near the top of its range, and little or no upper wick. It shows selling that was rejected within the session. In a downtrend at a tested level it is reversal evidence; the identical shape elsewhere is not.

A doji is a candle whose open and close are effectively equal, leaving a cross-like shape. It marks indecision — buyers and sellers finishing the session where they started. On its own it is information about the current bar, not a directional signal.