🕯 How to understand Japanese candlestick charts in detail
Japanese candlestick charts are a visual map of price movement.
Each candle gives you four vital pieces of information about the market over a specific time period (like one minute, one hour, one day).
This is what each candle reveals to you:
🧠 Anatomy of a Japanese candle
Each candle contains:
Opening price (Open): the price at the beginning of the time period
Highest price (High): The highest point the price reached during the period
Lowest price (Low): The lowest point the price reached during the period
Closing price (Close): the price at the end of the time period
Candle shape:
The body (the thick part) represents the distance between the opening price and the closing price.
The shadow (the thin line above and below the body) represents the highest and lowest prices during the period.
Part what does it mean?🟥 Red candle Closing price is lower than opening price (bearish candle)🟩 Green candle Closing price is higher than opening price (bullish candle)Upper wick shows how far buyers pushed the price up before sellers took controlLower wick shows how far sellers pushed the price down before buyers came back
📚 Basic concepts you need to understand
1. Candle size matters
Large body and small wicks = strong momentum (bullish or bearish).
Small body and long wicks = indecision in the market (trend may reverse or continue).
2. The length of the wick tells the story
Long upper wick = buyers were strong but sellers prevailed → bearish reversal potential.
Long lower wick = sellers were strong but buyers prevailed → bullish reversal potential.
3. Candle sequence is more important than a single candle
One candle = one word.
Candle series = a complete sentence.
So, judge the candles in their context and not individually.
📈 Candle patterns you should know
PatternMeaningDojiIndecision and uncertainty — may precede a reversal or continuationHammerBullish reversal — buyers regained controlShooting StarBearish reversal — sellers regained controlBullish EngulfingStrong signal for bullish reversalBearish EngulfingStrong signal for bearish reversalMorning Star / Evening StarStrong reversal patterns made of three candles
(Would you like me to also create an illustration for these patterns? 🎨)
🛡 How to read Japanese candles professionally
✅ Start with zooming out:
Analyze the larger time frame (like daily or four hours) to understand the overall trend before focusing on smaller frames (like hourly or 15 minutes).
✅ Identify support and resistance areas:
Watch how candles behave at these levels — they are keys to the next movement.
✅ Wait for confirmation:
Don't rely on just one candle.
Look for patterns + confirmation from volume or other indicators.
✅ Combine candles with technical indicators:
Candles tell the story, and indicators (like RSI or moving averages) provide additional clues.
✅ Practice continuously:
Understanding candles becomes easier with daily practice — even if you are not trading.
🔥 Quick summary:
Japanese candles = the language of the market.
Each candle tells a story about the struggle between buyers and sellers, strength versus weakness, and fear versus greed — you just need to learn how to read this story correctly.
Your mission as a trader:
Don't just memorize shapes — understand the meaning behind them.
Connect the candle's position (in the trend or at support/resistance) + the visible pattern + trading volume together to make the right decision.
