Many beginners look at the chart as if it is a collection of lines and colors without meaning... but the truth is that Japanese candlesticks are a powerful visual tool that tells you what is happening in the market, in a language understood by every trader if they learn its basics.
🔍 What is a Japanese candlestick?
It is a visual representation of price movement over a specific time period (such as 1 minute, 1 hour, or 1 day), and consists of:
• The body: Represents the difference between the opening and closing price.
• The upper wick: The highest price reached by the asset during the period.
• The lower shadow: The lowest price reached by the asset during the same period.
📈 Bullish or bearish candle?
• The bullish candle: The closing price is higher than the opening, and it is often in green or white color.
• The bearish candle: The closing price is lower than the opening, and it is often in red or black color.
A long candle indicates strong movement in a certain direction, while long shadows indicate volatility or "price rejection."
💡 A quick example from the market:
If a one-hour candle opened at a price of $25,000 and closed at $25,200, it is a bullish candle.
However, if it opened at $25,000 and closed at $24,700, it is a bearish candle, which may reveal selling pressure during that period.