How do candlestick patterns work, and what do different formations indicate?

Candlestick patterns reflect price movements and market sentiment, with key formations signaling potential trend reversals. Bullish patterns, like the Engulfing and Morning Star, suggest a shift from downtrends to uptrends, while bearish patterns, like the Engulfing (Bearish) and Evening Star, indicate a reversal from uptrends to downtrends. Other important patterns include the Doji, which signals indecision, and the Hammer and Hanging Man, which suggest reversals at the bottom or top of trends, respectively.