If you have ever seen a Bitcoin or Ethereum chart and wondered **"What do these candles mean?"**, this article is for you! **Japanese candles** (or candlesticks) are one of the most useful tools for understanding the crypto market.
Here you will learn:
✅ **What candles are and how to interpret them**
✅ **The most important patterns (and what they predict)**
✅ **How to use them to make better decisions**
## **🕯️ What Are Japanese Candles?**
Each "candle" represents the **price of a cryptocurrency over a period of time** (1 minute, 1 hour, 1 day, etc.). It has two parts:
1. **Body** (thick part): Shows the **open** and **close** price.
- **Green (or white)** = The price **rose** (close > open).
- **Red (or black)** = The price **fell** (close < open).
2. **Wicks (or shadows)**: Indicate the **highs and lows** reached during that time.
📌 **Example:**
- If a Bitcoin candle on 1 hour is **green**, it means that during that hour the price **rose**.
- If it is **red**, the price **fell**.
## **🔍 Most Important Candle Patterns (and What They Mean)**
### **1. Hammer 🔨**
- **Appears in a downtrend.**
- **Small body + long wick down.**
- **Signal:** Possible **bounce** (the price may rise).
### **2. Hanging Man ☠️**
- **Just like the hammer, but in an uptrend.**
- **Signal:** Possible **drop** (the price may fall).
### **3. Bullish Engulfing 🐂**
- **A small red candle followed by a large green one that "covers" it.**
- **Signal:** Trend change **to up**.
### **4. Bearish Engulfing 🐻**
- **A small green candle followed by a large red one that "covers" it.**
- **Signal:** Trend change **to down**.
### **5. Doji (Indecision) ➖**
- **Almost invisible body (open = close).**
- **Signal:** The market is **undecided** (it may change direction).
## **📈 How to Use These Patterns for Trading?**
1. **Confirm with volume 📢**
- A pattern is more reliable if there is **high trading volume** (more people buying/selling).
2. **Combine them with supports and resistances 🏗️**
- If a "hammer" appears near a **support** (area where the price usually bounces), it is more likely to rise.
3. **Do not trade based only on one candle ⚠️**
- Use candles along with other tools (RSI, moving averages).
## **🚀 Conclusion: Start Practicing**
Reading candles is like learning a **new market language**. At first, it can be confusing, but with practice, you will be able to:
✔️ **Identify trends.**
✔️ **Predict possible price changes.**
✔️ **Make smarter decisions.**
📌 **Test on real-time charts** (on TradingView or Binance) and observe how they behave.
**🔔 Follow us for more simple trading guides.** #VelasJaponesas #CriptoTrading #AprendeCrypto 🚀
