To understand candle reading, you must know the shapes of the candles at opening and closing, and there are 6 shapes:
1 - Long green candle: indicates the victory of buyers and control over the market. Or a long red candle indicates the victory of sellers and control over the market.
2 - Green candle with a medium body and a long lower wick: indicates an attempt by sellers to push the price down, but in the end, the price returned up and closed green, indicating a victory for buyers. For the red wick, it means an attempt by buyers, but sellers ultimately won.
3 - Similar to the first candle but with some resistance from both sides.
4 - Medium or small red or green candle with a long wick: indicates a long-range battle between them with no victor, meaning the result is a draw.
5 - Long wick green candle: the upper wick indicates the strength of buyers, but sellers also resisted them and closed the candle with a small body. The red candle indicates the strength of sellers, but buyers resisted them and closed with a small red body.
6 - Doji candles: where the opening price is the same as the closing price, and they usually indicate a price reversal; we will discuss them further under types of candles.
All of the candles we mentioned are types of Japanese candlesticks that are useful for reading a single candle only, and by combining more than one candle, patterns and types are formed.
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