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1. Identify Trends

• Uptrend: If the candlestick chart shows several consecutive bullish candles (green), and each bullish candle's closing price is higher than the previous one, it indicates that the market is in an uptrend.

• Downtrend: If several consecutive bearish candles (red) appear, and each bearish candle's closing price is lower than the previous one, it indicates that the market is in a downtrend.

• Trend Reversal Signals: Certain specific candlestick patterns such as hammer, inverted hammer, morning star, engulfing pattern, etc., usually appear during trend reversals and can serve as signals to enter the market.

2. Focus on Support and Resistance Levels

• Support Level: When the price drops to a certain range and repeatedly rebounds, that range is the support level. If the price approaches the support level and a bullish candlestick pattern appears (like a hammer), consider entering a long position.

• Resistance Level: When the price rises to a certain range and repeatedly falls back, that range is the resistance level. If the price approaches the resistance level and a bearish candlestick pattern appears (like a hanging man), consider entering a short position.

3. Volume and Price Coordination

• Volume and Price Coordination in Uptrend: If the price rises while the trading volume also increases, it indicates strong buying pressure in the market, and it may be a good time to enter a long position.

• Volume and Price Coordination in Downtrend: If the price falls while the trading volume increases, it indicates strong selling pressure in the market, and it may be a good time to enter a short position.

4. Special Candlestick Patterns

• Hammer: Appears at the bottom of a downtrend, with a long lower shadow, at least twice the size of the body, indicating a potential upward reversal, and serves as a signal to enter a long position.

• Inverted Hammer: The pattern is similar to a hammer, but the shadow is above, indicating a potential upward reversal, suitable for entering a long position.

• Three White Soldiers: Composed of three consecutive bullish candles, each closing price higher than the previous high, indicating strong upward momentum, suitable for entering a long position.

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