Japanese Candlesticks

Read price action using candlestick patterns, learning what candlestick colors, wicks, and bodies mean. Discover trend reversal and continuation patterns.

Structure of a Japanese Candlestick

Each Japanese candlestick represents price movement within a specific timeframe (1min, 1h, 1d, 1W, etc.). 📊 Candlestick elements: • Body: the difference between the opening and closing price • Upper wick: the highest price during the period • Lower wick: the lowest price during the period 🟢 Bullish candle: close > open 🔴 Bearish candle: close < open 📏 The longer the body, the stronger the price movement. The longer the wicks, the greater the market uncertainty.

Popular Candlestick Patterns

⭐ Reversal Patterns (trend change signal): • Doji: small body, long wicks = market indecision • Hammer: long lower wick, small body at the top = reversal of a downtrend • Shooting Star: long upper wick = reversal of an uptrend • Engulfing: large candle "engulfs" the previous one

📈 Continuation Patterns (trend continues): • Three White Soldiers: 3 large green candles in a row • Three Black Crows: 3 large red candles in a row • Marubozu: candle without wicks = strong momentum

Example: Hammer Pattern

A Hammer appears at the bottom of a downtrend and signals a potential upward reversal.

Pro Tip: Patterns in Context

💡 Never analyze a single candle in isolation! Always look at the context: • Where does the pattern appear? (trend, support, resistance) • What is the volume? (high volume = stronger signal) • Do other indicators confirm? (RSI, MACD)

📌 Hammer pattern at support + high volume = strong buy signal