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# Three candlestick patterns that held up when we went back and checked
- URL: https://the-traders-lab.ghost.io/three-candlestick-patterns-that-held-up/
- Published: 2026-10-10T01:10:00.000Z
- Updated: 2026-10-10T01:31:49.000Z
- Description: We ran billions of data points on candlestick patterns and kept only the setups that beat the market's normal baseline. Three came out on top, and each one is a candle you already know plus one condition that does most of the work.
- Author: James H
- Tags: Candlestick patterns

If you have ever read a book about candlestick patterns, you know the feeling. Every chart in it looks like magic: the hammer sitting right at the bottom, the engulfing candle right at the turn, the doji right before the big move. Then you try them on a live chart, going forward, and the magic fades about as fast as you can say "it looked so obvious in hindsight."

That happens because most of those charts were picked after the fact. A pattern that happens to sit at a bottom on a chart somebody chose for a book tells you nothing about the next one. If I told you the market goes up more often than not on days when I sleep on my left side, you might even believe I had checked it, but you probably wouldn't want to trade on it. A lot of candlestick lore is that, a good story about a few charts.

So we went back and checked. We ran billions of data points on candlestick patterns and kept only the setups that beat the market's normal baseline. Three came out on top of everything we tested, and the part that surprised me is that each one is a candle you have probably seen a hundred times, plus one condition that does most of the work.

## The three that made it

**The hammer, on a quiet day.** A hammer after a down week finished higher five trading days later 71.9% of the time on SPY since 2005 and QQQ since 2011, with an average move of +1.32% over those five days. The condition is the volume, and it runs the opposite way to what most people guess. [Here's the story of the quiet hammer](https://the-traders-lab.ghost.io/the-best-hammers-show-up-on-a-quiet-day/).

**The inverted hammer, on a busy day.** It looks like the worst possible day to buy, a rally that fell apart before the close, and over the same years it finished higher five days later 77.1% of the time, more often than either of the other two. Here the volume rule runs the other way. [Here's why it works](https://the-traders-lab.ghost.io/the-candle-that-looks-like-the-worst-day-to-buy/).

**The harami, with a gap at the open.** It is two candles, a big red day followed by a small green one tucked inside it, and it finished higher 69.2% of the time on SPY since 2005 and QQQ since 2011, it's the one you'll meet most often, and the whole thing hangs on how the second day opened. [Here's the harami that's settled before the bell](https://the-traders-lab.ghost.io/the-harami-thats-settled-before-the-opening-bell/).

Each one has its own post here with a real chart, and if you'd like to see them fire three evenings in a row, [Christmas 2008](https://the-traders-lab.ghost.io/christmas-2008-three-setups-in-a-row/) is the best example I know.

## Get the exact rules, free

The exact rules for all three are in a free guide: how long each wick has to be, where the volume line sits, how big the opening gap needs to be, and a checklist you can run on any free chart in a few minutes after the close.

[**Send me the free guide: Highest Performing Candlestick Patterns**](https://thetraderslab.io/free/candlesticks?utm%5Fsource=ghost&utm%5Fmedium=blog&utm%5Fcampaign=three-candlestick-patterns-that-held-up)

## The catch, and why we built a scanner

There's one reason most people never trade these, and it isn't that they're hard to understand. They only exist at the close, because a hammer isn't a hammer until the session is over, and the condition that makes each one work never shows on an ordinary chart. Somebody has to work out the five-day slide, the volume against its twenty-day median and the size of the opening gap, chart by chart, every evening.

On SPY and QQQ that's a few minutes. On a hundred stocks it's more checking than anybody is going to do by hand, night after night, so we built a scanner that does it. Every evening after the close it checks all three on the 100 largest US stocks and on SPY, QQQ and IWM, and it shows you a setup only on the stocks where it has already worked in that stock's own history.

[**Try the Candlestick Pattern Scanner free**](https://thetraderslab.io/try/candlestick-scanner?utm%5Fsource=ghost&utm%5Fmedium=blog&utm%5Fcampaign=three-candlestick-patterns-that-held-up)

**James H**

*Your Friendly Neighborhood Trading Nerd*