Japanese Candlesticks are a way to display price movement in financial markets (crypto, forex, stocks…) and are widely used in technical analysis.
What does a single candle show?
Each candle represents a specific time period (1 minute, 1 hour, day…), and contains 4 pieces of information:
Opening Price (Open)
Closing Price (Close)
Highest Price (High)
Lowest price (Low)
Candle components:
Body: the difference between opening and closing.
Upper wick: highest price reached.
Lower wick: lowest price reached.
Colors:
🟢 Green candle: closing above the opening (price went up).
🔴 Red candle: closing below the opening (price went down).
The most famous patterns:
1️⃣ Hammer
Small body + long lower wick.
Often appears after a decline.
It may mean an upward reversal.
2️⃣ Hanging Man
Similar to the hammer but comes after an upward move.
It may indicate a downward reversal.
3️⃣ Bullish Engulfing
A large green candle engulfs the previous red candle.
Strong upward signal.
4️⃣ Bearish Engulfing
A large red candle engulfs the previous green candle.
Strong downward signal.
5️⃣ Doji
Very small body (opening ≈ closing).
It means hesitation in the market.
Important advice ⚠️
Do not rely on a single pattern.
Always:
Watch the overall trend (Trend)
Use support and resistance areas
Add indicators like RSI or Volume
If you want, I can explain candles in a crypto-specific way or in a professional manner suitable for day trading 😉