#CryptoCharts101 In the world of financial markets, stories are not told with words, but with candles. Silent candles stand on the lines of charts, telling tales of the struggle between buyers and sellers, and whispering to the insightful analyst about what is to come, if they know how to listen.
The first steps: Charting basics.
Charts are the visual language of markets, and the most famous of all: line chart, bar chart, and then the most used and influential: Japanese candlestick chart.
Each candle represents a time period, revealing four secrets: opening price, closing price, highest point, and lowest point. The magic lies in its shape, as its color (green/upward or red/downward) tells you the state of the market, and its upper and lower wicks reveal hidden struggles that are not shown in the numbers alone.
Candle patterns: The market's hidden language.
Over time, traders learned recurring patterns in candle behavior; shapes that repeat themselves as if they are the market's signatures on its decisions. Some of the most notable patterns include:
Hammer: appears at the bottom of a downtrend, its body is small and its wick is long, heralding the birth of a new rise.
Hanging Man: stands at the peak of an uptrend, indicating weakness among buyers and perhaps the beginning of a reversal.
Engulfing: a strong candle that engulfs the previous one, announcing the dominance of one side.
Morning and Evening Star: Triangular models that signal a change in direction, combining hesitation and then resolution.
These are not just artistic shapes, but psychological signals; they indicate when sellers were scared, when buyers hesitated, and when one side won the battle.
Chart patterns: Trend and breakout maps.
Along with candles, larger patterns are drawn by price movement over time, used to identify trends, reversals, or breakouts. Some of the most notable include:
Head and Shoulders: one of the strongest reversal patterns, appearing at peaks or troughs, indicating the exhaustion of the trend and its readiness to leave.
Triangles: represent a struggle between buying and selling pressure, and signal an upcoming breakout.
The ascending triangle often breaks upward.
The descending triangle often breaks downward.
Flags and pennants: appear in the middle of the trend, as if the market is catching its breath before continuing on its path.
Price channels: show a regular trend within parallel lines, used for entering and exiting while the trend continues.
My vision: When the market whispers, listen to its details.
My personal vision in analysis starts from a simple principle: "Every pattern carries an intention."
I first look for the place before the shape. I am not interested in a hammer candle if it is not at a clear bottom, nor do I rely on the head and shoulders pattern if a clear trend has not yet formed.
As I observe the volume, a strong candle without strong volume may be false.
I always look for consolidation before the explosion, as the market usually catches its breath before taking off or dropping, leaving traces in the form of triangles or sideways ranges.
In the end, I do not rely on a single pattern, but combine several indicators: candles, models, indicators, and time context, to formulate a balanced decision that does not depend on momentary intuition, but on a calm reading of the entire scene.
Conclusion
Candle and chart patterns are not magical predictions, but tools that reflect human nature in the markets: their fear, greed, patience, and hesitation. And those who master decoding them will come closer to understanding the market, not as reckless speculators, but as artists reading the rhythm of battle in the silence of candles.