Components of the Japanese Candle and Reading It Step by Step
Lesson Two: Components of the Japanese Candle and Reading It Step by Step
Before we dive into the patterns, it is essential to understand how to read each candle by itself, as each candle tells us a story between buyers and sellers over a specific time period (1 minute, 1 hour, 1 day... etc)
✅ Components of the Japanese Candle:
Each candle consists of:
1. The Real Body (Body)
🔹 Represents the difference between the opening price and the closing price.
If the candle is green (or white): it means the price closed higher than the opening price (upward).
If the candle is red (or black): it means the price closed lower than the opening price (downward).
$BNB
2. Shadows (Wicks or Shadows)
🔹 These are the upper and lower lines and indicate:
Upper shadow: The highest price the market reached.
Lower shadow: The lowest price recorded during the same period.
📌 Simple Example:
If the candle was:
Opening: 100
Closing: 120
Highest: 130
Lowest: 90
🟢 It would be a green candle with a body from 100 to 120, an upper shadow up to 130, and a lower shadow down to 90.
-Your Understanding
🎯 What do we gain from reading the candle?
If the candle has a long upper shadow and a small body → the market tried to rise and failed (selling pressure).
If the candle has a long lower shadow and a small body → the market dropped and then bounced back up (buying pressure).
If the candle is long with no shadows → complete dominance of one side (buyer or seller).
$BNB
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