In the world of financial markets, stories are not told with words, but with candles. Silent candles stand on the lines of the charts, telling tales of the struggle between buyers and sellers, and whispering to the insightful analyst about what is to come, if they listen well.

The Beginning: Basics of Charts

Charts are the visual language of the markets, and the most famous ones are: line charts, bar charts, and then the most used and influential: Japanese candlestick charts.

Each candle represents a time period, revealing four secrets: opening price, closing price, highest point, and lowest point. The magic lies in its shape, as its color (green/upward, or red/downward) tells you about the state of the market, and its upper and lower wicks reveal hidden struggles that do not show in the numbers alone.

Candlestick Patterns: The Hidden Language of the Market

Over time, traders learned recurring patterns in the behavior of candles; shapes that repeat themselves as if they are the market's signatures on its decisions. Some of the most prominent of these patterns:

Hammer: Appears at the bottom of a downtrend, its body is small and its wick is long, heralding the birth of a new upward trend.

Hanging Man: Stands at the top of an uptrend, indicating weakness among buyers and possibly the beginning of a reversal.

Engulfing: A strong candle that engulfs the previous one, announcing the dominance of one of the sides.

And so on... Like if you care to continue with this important information.