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Quizzes > Business & Finance > Finance & Economics

Take the Ultimate Candlestick Pattern Quiz

Think you can ace this candlestick chart patterns quiz? Let's find out!

Difficulty: Moderate
2-5mins
Learning OutcomesCheat Sheet
Paper art candlestick chart quiz elements showing bullish and bearish patterns on teal background

Think you've got the eye for market moves? Dive into our candlestick pattern quiz and discover how well you spot key chart formations. You'll test your knowledge of classic formations and boost your trading skills with hands-on practice. This candlestick chart quiz challenges you to identify bullish reversals, bearish continuations, and sharpen your trading pattern quiz prowess. From candlestick chart patterns quiz basics to stock chart patterns quiz insights, it's tailored for aspiring traders eager to level up. Ready to test yourself? Jump into our free candlestick pattern quiz or try an interactive trading quiz now and ignite your technical analysis journey!

What does a green or white candlestick typically indicate in price action?
Trading volume peaked at the close.
The closing price is higher than the opening price.
There was no price change during the period.
The closing price is lower than the opening price.
A green or white candlestick shows that buyers dominated the session, pushing the close above the open, which is a bullish signal. The filled color is used to distinguish upward momentum over the trading period. Traders use this visual cue to gauge positive market sentiment. For more details, see Investopedia.
What is a doji candlestick?
A candle with a long lower shadow and small body.
A candle where the open and close prices are nearly equal, showing indecision.
A long bullish candle engulfing the previous body.
Any candle with a significant price gap.
A doji forms when the opening and closing prices are virtually the same, leaving a very small or nonexistent body. This pattern reflects market indecision, with neither buyers nor sellers in control. Dojis are often observed at potential reversal points when combined with trend context. Learn more at Investopedia.
Which candlestick pattern is considered a bullish reversal signal at market bottoms when preceded by a downtrend?
Shooting Star
Hammer
Hanging Man
Dark Cloud Cover
The hammer features a small real body at the top of the range and a long lower shadow, indicating rejection of lower prices and potential bullish reversal. It must appear after a downtrend to signal buyers stepping in. Traders look for confirmation from subsequent bullish candles for higher reliability. See Investopedia.
Which candlestick pattern signals a bearish reversal when seen at the top of an uptrend?
Morning Star
Hammer
Doji
Evening Star
The evening star is a three-candle pattern signaling a bearish reversal: a large bullish candle, a small indecisive candle, and a large bearish candle closing well into the first candle's body. It appears at market tops after an uptrend. Confirmation on the following session increases its reliability. More info at Investopedia.
What does a long lower shadow on a candlestick indicate?
Strong continuation of the downtrend.
High selling pressure at the close.
Rejection of lower prices and buying pressure.
That a doji pattern has formed.
A long lower shadow shows that prices moved substantially lower during the session but were pushed back up by buyers, indicating rejection of lower levels. This can signal potential support or bullish sentiment if observed after a decline. However, context matters and traders look for confirmation. For deeper insight, visit Investopedia.
The shooting star candlestick pattern is characterized by which of the following?
Identical open and close prices.
Large body with no shadows at either end.
Small body near the low with a long upper shadow.
Long lower shadow with a small body at the top.
A shooting star has a small real body near the session low and a long upper shadow, reflecting rejection of higher prices after an uptrend. It suggests the market may be topping out, as buyers failed to sustain rally levels. Confirmation by a following bearish candle improves its predictive power. See Investopedia.
Which color candlestick typically denotes a decrease in price over the period in many charting platforms?
Blue
Orange
Green or white
Red or black
On most platforms, red (or black in some styles) indicates that the closing price is below the opening price, signaling a bearish session. This color coding helps traders quickly recognize down periods. Platforms may allow customization, but red is the industry standard for declines. Learn more at Investopedia.
In a bullish engulfing pattern, which price action must occur?
Two doji candles in succession at support.
A small bearish candle followed by a larger bullish candle that completely engulfs the previous body.
A large bearish candle followed by a smaller bullish candle within its body.
A small bullish candle followed by an even smaller bearish candle.
A bullish engulfing pattern features a small bearish candle then a larger bullish candle that envelops the earlier body, indicating a shift from sellers to buyers. It often appears after a downtrend, signaling potential reversal. Volume increase on the engulfing candle strengthens the pattern's reliability. For details, check Investopedia.
What is the primary difference between a hammer and an inverted hammer?
A hammer forms at tops, inverted hammer at bottoms.
A hammer has a long lower shadow, whereas an inverted hammer has a long upper shadow.
There is no difference apart from color.
A hammer has equal shadows; inverted hammer has none.
Both patterns appear after downtrends but differ in shadow placement: hammers have long lower wicks and small bodies at the top, while inverted hammers have long upper wicks and small bodies at the bottom. Both signal potential bullish reversals, though confirmation is needed. Position in the trend is key to correct interpretation. More info at Investopedia.
Which sequence correctly describes a morning star pattern?
Large bearish candle, small indecisive candle, large bullish candle.
Large bullish candle, small indecisive candle, large bearish candle.
Two consecutive bearish candles followed by a doji.
Doji followed by two small candles in opposite directions.
A morning star is a three-bar bullish reversal: a strong bearish candle, a small-bodied candle (often a doji), then a strong bullish candle closing well into the first candle's body. It appears at market bottoms and signals a shift in momentum. Confirmation on the fourth day improves its reliability. Details at Investopedia.
Which pattern involves three consecutive bearish candlesticks, each closing lower than the previous one?
Bullish Harami
Three Black Crows
Three White Soldiers
Evening Star
Three Black Crows consist of three long bearish candles with each opening within the prior body and closing at progressively lower levels, indicating strong selling pressure. This pattern suggests a bearish reversal or continuation depending on the preceding trend. Volume and location in the trend add context. More on Investopedia.
What characterizes the piercing line candlestick pattern?
Two bullish candles in succession with higher highs.
A bearish candle followed by a bullish candle that opens lower and closes above the midpoint of the first candle.
Three small candles forming a staircase pattern.
A doji sandwiched between two bearish candles.
The piercing line is a two-candle bullish reversal: the first is bearish, the second opens below the low of the first and closes above its midpoint. This indicates a shift from selling to buying momentum. It is most effective at support levels and with confirming volume. For more details, see Investopedia.
How does a bearish harami differ from a bullish harami?
They are identical but colored differently.
A bearish harami forms only on higher volume days.
A bearish harami always has long wicks; bullish harami never does.
A bearish harami appears after an uptrend with a small bearish candle within a larger bullish candle, while bullish harami appears after a downtrend with a small bullish candle within a larger bearish candle.
In a bearish harami, price is in an uptrend, then a large bullish candle is followed by a smaller bearish candle entirely within the first candle's body, signaling potential reversal. A bullish harami is the opposite: it occurs in a downtrend with a large bearish candle followed by a smaller bullish candle contained within the first. Context of preceding trend is crucial. Learn more at Investopedia.
What does the three white soldiers pattern indicate?
Bearish exhaustion after prolonged rally.
Indecision in a ranging market.
Strong bullish reversal or continuation indicated by three consecutive long bullish candles.
A doji pattern followed by two bearish candles.
Three White Soldiers are three long bullish candles, each opening within the previous body and closing near its high, showing sustained buying pressure. This pattern often indicates a strong bullish reversal at the end of a downtrend or continuation in an uptrend. Traders watch volume for confirmation of extended momentum. See Investopedia.
How is volume best used to confirm a breakout candlestick pattern?
Low volume ensures the breakout is genuine.
Volume is irrelevant for candlestick patterns.
Higher-than-average volume on the breakout candle confirms strength of the move.
Only volume on the previous candle matters.
A breakout accompanied by higher-than-average volume shows strong participation by traders, validating the price move beyond support or resistance. Without volume confirmation, breakouts may be false and prone to reversals. Traders often compare current volume to recent averages for context. Learn more at Investopedia.
What is the main difference between the dark cloud cover and piercing line patterns?
Dark cloud cover contains three candles; piercing line contains four.
Dark cloud cover is bearish reversal; piercing line is bullish reversal mirror image.
They are identical aside from color conventions.
Piercing line always forms at resistance; dark cloud at support.
Dark cloud cover is a bearish reversal pattern where a bullish candle is followed by a bearish candle that opens above and closes below the midpoint of the first. Piercing line is the bullish reversal mirror: bearish candle followed by bullish candle that closes above half of the first. Each signals a shift in control when appearing at key levels. For more details, see Investopedia.
What does a tweezer tops pattern indicate?
Indecision with two small-bodied candles.
Continuation of the uptrend with strong momentum.
A bullish reversal signified by matching lows.
Potential bearish reversal due to matching highs on two consecutive candles.
Tweezer tops occur when two consecutive candles reach the same high, showing that buyers are unable to push price higher, hinting at a potential bearish reversal. The formation is more reliable at resistance levels and with confirming bearish signals. Volume and subsequent price action help validate the pattern. See Investopedia.
A spinning top candlestick reflects which market condition?
Confirmation of a breakout trend.
Indecision, as buyers and sellers reach equilibrium with small body and long shadows.
A gap up or gap down scenario.
Strong bullish momentum with little volatility.
A spinning top has a small real body and long upper and lower shadows, indicating that buyers and sellers pushed prices in both directions but closed near the open. It signals market indecision and potential trend pause or reversal. Traders look for confirmation from subsequent candles. For more, visit Investopedia.
How does the rising three methods pattern indicate continuation?
A doji inside a large bearish candle.
A long bullish candle, several small bearish or neutral candles within its range, and another strong bullish candle.
Three bearish candles followed by a doji at support.
Four alternating bullish and bearish candles.
Rising three methods is a bullish continuation: one long bullish candle, then three small bearish or neutral candles trading within its range, followed by another long bullish candle closing above the first. This shows brief consolidation inside an uptrend before resumption. Volume patterns also assist in confirmation. Details at Investopedia.
What does a hanging man pattern at market tops suggest?
A trendless market phase.
Indecision with low trading activity.
Strong continuation of the uptrend.
Potential bearish reversal due to long lower shadow after an uptrend.
A hanging man looks like a hammer but forms after an uptrend, with a small body at the top and long lower shadow showing that sellers pushed prices down before buyers regained control. It warns of potential reversal if confirmed by a bearish candle. Traders use additional signals for validation. See Investopedia.
How should a trader typically respond to a three black crows pattern?
Consider exiting long positions or entering short positions due to sustained selling pressure.
Trade only at the next market open without confirmation.
Wait for a doji before making any decisions.
Add to long positions anticipating a bullish reversal.
Three black crows represent three successive bearish candles with lower opens and closes, indicating strong selling momentum. Traders often exit longs and consider short entries, but confirmation from volume and trend strength is recommended. Risk management is crucial if using this pattern. More at Investopedia.
What does an inside bar pattern represent in candlestick analysis?
Immediate trend reversal signal.
Strong breakout with high volatility.
A gap between two trading sessions.
Consolidation with the bar's range contained within the previous bar's range.
An inside bar forms when a candle's high is lower than the previous high and its low is higher than the previous low, indicating price consolidation and a pause in momentum. Traders view it as a setup for potential breakout in either direction. It is more reliable near support or resistance levels. Learn more at Investopedia.
How does combining candlestick patterns with support and resistance confluence improve trade probability?
It only matters for intraday trading, not longer timeframes.
It aligns price action signals with key levels, enhancing the likelihood of a valid reversal or breakout.
It guarantees a 100% win rate.
It removes the need for stop-loss orders.
When candlestick patterns form at established support or resistance levels, the confluence of signals increases confidence in potential reversals or breakouts. These combined factors reflect trader psychology at critical price points. However, no strategy is foolproof; risk management remains essential. See Investopedia.
How is Volume Weighted Average Price (VWAP) used to validate candlestick pattern breakouts?
A price breakout above VWAP confirms bullish strength and institutional involvement.
VWAP replaces all candlestick patterns in analysis.
VWAP is only used for identifying trend direction, not breakouts.
A breakout below VWAP indicates bullish momentum.
VWAP provides the average price weighted by volume and is used by institutional traders to gauge value. A candlestick breakout above VWAP suggests that buying pressure is strong enough to drive prices above the average cost basis, validating the move. Conversely, a breakdown below VWAP can confirm bearish strength. For more, see Investopedia.
How can backtesting metrics quantify the reliability of candlestick patterns?
By calculating the color frequency of bullish versus bearish candles.
By relying solely on forward test results without historical data.
By using backtesting metrics only on non-trading days.
By analyzing historical win rates, average returns, and risk-reward ratios for specific patterns.
Backtesting involves applying candlestick pattern rules to historical data to measure success rates, average profits, and drawdowns. These metrics help traders understand which patterns have statistical edge under specific market conditions. It also assists in optimizing entry and exit rules. More information at Investopedia.
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Study Outcomes

  1. Identify Key Bullish Patterns -

    Recognize bullish candlestick formations such as the hammer and bullish engulfing to anticipate potential market rallies.

  2. Identify Key Bearish Patterns -

    Spot bearish formations like the shooting star and bearish harami to detect possible downtrends in stock chart patterns.

  3. Differentiate Continuation vs. Reversal Signals -

    Analyze candlestick relationships to determine whether a price trend is likely to persist or reverse direction.

  4. Apply Patterns to Trading Decisions -

    Use insights from the candlestick chart patterns quiz to inform entry and exit points in your trading strategy.

  5. Reinforce Pattern Recognition Skills -

    Test and strengthen your chart-reading intuition through our candlestick pattern quiz to build confidence in real-world scenarios.

Cheat Sheet

  1. OHLC Anatomy -

    Every candlestick encodes the Open, High, Low, and Close prices of a trading period, often abbreviated as "OHLC," which you can memorize by the phrase "Only Happy Learners Count." According to Investopedia and university finance textbooks, the body shows the price range between open and close, while the wicks mark the extremes. For example, a long green body with short wicks signals strong bullish momentum in a candlestick pattern quiz context.

  2. Bullish Reversal Signals -

    Key patterns like the Hammer and Bullish Engulfing often mark a shift from downtrend to uptrend, as noted by the CFA Institute. A Hammer has a small body and long lower wick - think "buy the dip" - while a Bullish Engulfing candle completely covers the prior red body. Practice spotting these in your candlestick chart quiz to build confidence.

  3. Bearish Reversal Indicators -

    Shooting Star and Bearish Engulfing formations can warn of an impending downtrend, as described in academic journals on behavioral finance. The Shooting Star's long upper wick suggests failed rallies ("shoot 'em down"), and a Bearish Engulfing candle swallows a green candle to confirm selling pressure. Use these in a stock chart patterns quiz to test your bearish-spotting skills.

  4. Indecision Patterns (Doji & Spinning Top) -

    Doji and Spinning Top candles, highlighted by StockCharts.com research, reflect market indecision when open and close prices are nearly identical. These often precede continuation or reversal, so look for a confirming candle next. Remember the trick "Doji pauses drama" to recall that confirmation is key.

  5. Confirmation & Volume -

    Always confirm patterns with subsequent candles and volume spikes - per guidelines from the New York Institute of Finance - to avoid false signals. A strong reversal should pair with above-average volume, and tools like RSI or MACD can corroborate momentum shifts. Reinforce this in a trading pattern quiz by marking volume bars alongside your pattern identification.

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