TRADING COURSE
LESSON 4
Deciphering JAPANESE CANDLES - Your First Language of the Market
Hello! Today we will learn to "read" what the market tells us. Japanese candles are the basic alphabet of technical analysis. Once you understand them, you will see the charts with different eyes.
What is a candle?
Each candle represents the battle between BUYERS (bullish) and SELLERS (bearish) during a period of time (1 minute, 1 hour, 1 day, etc.).
Parts of a candle:
· BODY: Shows the OPENING and CLOSING price of the period.
· 🟢 GREEN BODY (or empty): The price CLOSED HIGHER than it opened → Buyers won.
· 🔴 RED BODY (or filled): The price CLOSED LOWER than it opened → Sellers won.
· WICKS (or shadows): Thin lines that show the MAXIMUM and MINIMUM price reached during that period.
Length matters!
· Long green candle: Strong buying force.
· Long red candle: Strong selling force.
· Small candle (with long wicks): Indecision, struggle between both sides.
✅ Practical tip:
You don't need to analyze each candle alone. Observe groups of candles to see patterns and the strength of the trend. A single candle can lie, but several tell a more reliable story.
👇 Practice question:
Look at this example (imagine or attach a simple image of two candles):
· Candle 1: Long green, short upper wick.
· Candle 2: Small red, long wicks up and down.
Who controlled the market in Candle 1? And what does Candle 2 indicate?
⏭️ Next class: We will apply this! We will identify TRENDS in the chart.
#TradingSchool #JapaneseCandles #TechnicalAnalysis #Chartismo
