Candlestick Patterns Quiz: Test Your Knowledge

Question 1

According to this guide, what decides whether a candlestick pattern is worth acting on?

Accepted Answer

Where the candle forms: the trend and the level around it

Question 2

What does a hammer candlestick look like?

Accepted Answer

A small body near the top of the range with a long lower shadow at least twice the body, and little or no upper wick

Question 3

For a hammer, what matters far more than the colour of its body?

Accepted Answer

Its location: it only earns the name after a clear decline, ideally at a level that has held before

Question 4

How do you tell a hammer apart from a hanging man?

Accepted Answer

By the trend they sit in: a hammer forms after a decline, a hanging man at the top of an uptrend

Question 5

After a hammer prints at a level, how does the guide suggest you confirm it before entering?

Accepted Answer

Wait for the next candle to trade above the hammer's high, then place your stop just under its low

Question 6

Why does the guide rate the engulfing pattern as the most dependable single reversal signal?

Accepted Answer

Because it shows a shift in control across two full sessions, not just within one candle

Question 7

What does a doji, where the open and close finish almost equal, tell you on its own?

Accepted Answer

Indecision: a sign the trend may be stalling, but not a reversal by itself