✍️ What are Candles?

Japanese candles are a visual way to display price movement in financial markets, such as cryptocurrencies or stocks. Each candle represents a time period (such as a minute, hour, or day) and shows:

- Opening price (Open)

- Highest price (High)

- Lowest price (Low)

- Closing price (Close)

Candle shape:

- The filled part (body): shows the difference between opening and closing.

- If the candle is green or white: the price closed higher than the opening (uptrend).

- If it is red or black: the price closed lower than the opening (downtrend).

- The wick (upper and lower shadow): shows the highest and lowest price during the period.

Main types of candles:

- Doji candle: opening = closing approximately → indecision in the market.

- Hammer candle: small body and long lower shadow → potential bullish reversal.

- Shooting Star candle: small body and long upper shadow → potential bearish reversal.

- Engulfing: a large candle engulfs a previous candle → indication of strength in the new direction.

✍️ Why is it important?

Candles help traders to:

- Read market psychology.

- Anticipate reversals or continuation of trends.

- Identify entry and exit points with greater accuracy.