Candlestick patterns are named shapes formed by one to three candles: the engulfing candle, the pin bar or hammer, the doji, the inside bar, the morning and evening star, and around twenty others. Each has a traditional meaning as a reversal or continuation signal, and traders use them as entry triggers at levels or on their own.
The claim is that the shape of recent candles reveals the balance of buying and selling and predicts the next move.
We tested twenty-four named patterns, as strictly defined entry rules, across 17 years of data on currencies, indices and gold with real trading costs. Not one showed an edge. The results were uniform: every pattern's trades, over thousands of instances, were consistent with chance, and after costs every one of them lost.
The reason is that a candle's shape is a description of a few hours of price and carries almost no information about the next few hours. The patterns are memorable and the winning examples are the ones that get remembered.
If you trade it anyway, treat the pattern as a way of timing an entry that some other reason justified, and test that other reason. On its own, the candle is decoration.