To win in trading with Japanese candlesticks, you need to learn to read the intentions of buyers and sellers through each candle. Here is a clear and structured method to effectively interpret candlesticks:
1. Understand what a single candle says
Each candle contains 4 key pieces of information:
Open: where the price started the period.
Close: where the price ended.
High / Low: extremes reached.
Color:
Green (or white): the price goes up.
Red (or black): the price goes down.
> The longer the body, the stronger the trend's force.
2. Observe the psychology behind the shape
Long upper wicks = sellers have taken control.
Long lower wicks = buyers have intervened.
Small body with long wicks on both sides = indecision (e.g., Doji).
3. Recognize winning patterns (in the right context)
Reversal patterns:
Hammer: at the bottom of a trend → potential rebound.
Shooting Star: at the top of a trend → possible drop.
Bullish / Bearish Engulfing: one candle engulfs the previous one → likely change.
Morning Star / Evening Star: 3 candles signaling a powerful reversal.
Continuation patterns:
Marubozu: full candle, no wick → strength in the trend.
Three white soldiers / Three black crows: 3 strong candles in the same direction = confirmation.
4. Never analyze a candle in isolation
> A candle has value only if it is in a clear context:
Support / resistance zone?
What is the underlying trend?
Is there significant volume?
5. Practical example
Imagine a "hammer" candle on an H4 support, after a big drop, followed by a green candle that closes above the hammer:
> Strong buy signal with stop below the hammer and TP at the next resistance level.
Conclusion
Candles are a market language. To win:
Combine shapes + context + volume.
Look for reactions in important areas.
Always validate your interpretation with other technical tools (like RSI, moving averages...).
#BinanceHODLerHAEDAL
