How to read Japanese candlesticks?
Title:
The First Language of the Market: Learn to Read Japanese Candlesticks Professionally
Japanese candlesticks are not just drawings; they are the language of the market that tells you where the price is heading. Each candlestick represents the price movement over a specific period (e.g., hour, 4 hours, day...).
Components of the candlestick:
Real body: The difference between the opening and closing price
Upper and lower shadow: Represents the highest and lowest price during the period
Color: Green (up), Red (down)
Important examples:
Hammer candle = Bullish reversal potential
Bearish engulfing candle = Strong bearish signal
Doji = Indecision in the market, anticipation of strong movement
Tip:
Do not read the candlestick in isolation, but within the overall context (trend + volume + support/resistance).