What does a green candle mean?

It means the close was higher than the open for that period. It says nothing about whether the next candle will be green.

Is a hammer a bullish signal?

A hammer shows that sellers pushed price down and buyers brought it back within the session. It is often discussed after a fall, but it does not predict a rise.

Which timeframe is best for candlestick patterns?

There is no best timeframe. Patterns on longer timeframes cover more trading, while short timeframes produce many more patterns and more noise.

Do candlestick patterns work in Indian markets?

Candles describe price action the same way on NSE and BSE as anywhere else. No pattern has a reliable win rate, so treat them as descriptions, not forecasts.

Candlestick patterns explained

Updated 11 October 2026

A candlestick chart shows four prices for each period: open, high, low and close. Each period, whether 5 minutes or one day, is drawn as one candle. Japanese rice traders used this idea centuries ago, and today it is the default chart on most Indian trading platforms.

Candle patterns are shapes made by one, two or three candles. They describe how buyers and sellers pushed price during those periods. They do not predict what comes next, and you should read them with that in mind.

Anatomy of a candle

Green (bullish) candle: close above open. Red (bearish) candle: close below open.

Body: the thick part, between open and close.
Upper wick (shadow): the line from the top of the body to the high.
Lower wick: the line from the bottom of the body to the low.
Colour: green (or hollow) when close is above open, red (or filled) when close is below open.

Worked example

Stock ABC opens at ₹200, goes as high as ₹210, dips to ₹195 and closes at ₹207 for the day.

It is a green candle, because the close (₹207) is above the open (₹200).
Body = ₹207 − ₹200 = ₹7.
Upper wick = ₹210 − ₹207 = ₹3.
Lower wick = ₹200 − ₹195 = ₹5.
Full range = ₹210 − ₹195 = ₹15, which equals 7 + 3 + 5.

The body is about half the range, so buyers held most of the day's gain, but sellers pushed it back ₹3 from the high.

Single-candle patterns

A doji has almost no body. A hammer has a long lower wick; a shooting star a long upper wick.

Doji

Open and close are almost equal, so the body is a thin line. It shows a session where neither side won by the close. After a long move, some traders read it as hesitation. On its own it says very little.

Hammer

A small body near the top of the range and a lower wick at least twice the body. Example: open ₹100, high ₹101.50, low ₹95, close ₹101. Body ₹1, lower wick ₹5, upper wick ₹0.50. Sellers pushed price down during the session but buyers brought it back. It is usually discussed when it appears after a fall.

Shooting star

The mirror of a hammer: a small body near the bottom and a long upper wick. Buyers pushed price up but could not hold it. It is usually discussed after a rise.

Two- and three-candle patterns

Engulfing: the second body covers the first. Morning star: a big red candle, a small candle, then a big green candle.

Engulfing

A bullish engulfing is a red candle followed by a green candle whose body fully covers the red body. A bearish engulfing is the reverse: a green candle swallowed by a larger red one. It shows that one side took control of the second session.

Morning star and evening star

A morning star has three candles: a long red candle, a small-bodied candle (sometimes a doji), and a long green candle that closes well into the first candle's body. An evening star is the mirror image after a rise: long green, small body, long red.

Why patterns are not signals

They describe the past. A hammer tells you what happened in that session, not what happens in the next.
Context changes everything. The same shape means different things in a trend, a range, before results or on a low-volume day.
Timeframe matters. A hammer on a 5-minute chart and one on a weekly chart are very different events.
Definitions vary. How small is a "small" body? Books and software disagree, so two people can label the same candle differently.
Studies are mixed. Many patterns fail as often as they work once costs are included. No pattern "always works".

Most people who use candles combine them with levels such as pivot points, with indicators like RSI, and above all with a planned stop-loss.

The risk side

Pattern-spotting is popular in intraday and F&O trading, where most individuals lose money. SEBI found about 9 in 10 individual F&O traders lost money in FY22 and FY25 (SEBI study, 2023 and 2025). Before any trade, work out your risk and reward and size the position so one wrong read cannot hurt you badly.

Questions people ask

What does a green candle mean?: It means the close was higher than the open for that period. It says nothing about whether the next candle will be green.
Is a hammer a bullish signal?: A hammer shows that sellers pushed price down and buyers brought it back within the session. It is often discussed after a fall, but it does not predict a rise.
Which timeframe is best for candlestick patterns?: There is no best timeframe. Patterns on longer timeframes cover more trading, while short timeframes produce many more patterns and more noise.
Do candlestick patterns work in Indian markets?: Candles describe price action the same way on NSE and BSE as anywhere else. No pattern has a reliable win rate, so treat them as descriptions, not forecasts.