Japanese Candlesticks: What EVERY trader should know ( and no one explains it well )

Do you know what successful traders have in common? Almost all of them use candlesticks to read the market. It's not magic, it's just understanding what the numbers say.

Candles, basically explained

A Japanese candle is like a summary of the day ( or of the hour, or of the minute) in which everything happened:

• Open: initial price
• Close: final price
• Maximum: the highest peak
• Minimum: the lowest floor

That's it. Everything else is visualization.

Green vs Red: Why Does It Matter?

Green candle (bullish): close > open. Buyers won the round.

Red candle (bearish): close < open. Sellers took control.

The height of the body tells you how strong that difference was. The “shadows” (lines above and below) show where the price tried to go but couldn't stay.

Patterns that work (sometimes)

The Hammer

You see a candle with a small body but a long lower shadow. It appears after a strong drop. It means: “they tried to push lower but couldn't.” A good sign that the bottom has been reached.

The Hanged Man

Similar to the hammer but appears after a rise. The price goes up but doesn't hold. Signal of weakness.

Bullish Engulfing Pattern

Two candles: first a small red (, then a large green ) that completely covers it. Buyers took control. This is called “reversal.”

( Bearish Engulfing Pattern Upside down: a large red candle that swallows a green candle. The sellers returned.

Why traders live off this

Candles give you three things:

1. Momentum: How strong was the movement? Large body = strong momentum. Small body = indecision.

2. Volatility: How much did the price jump? Long shadows = chaotic market. Short shadows = control.

3. Turning points: certain patterns predict directional changes. Not always, but enough.

The trick that works

It's not about memorizing 100 patterns. It's about understanding what's happening: who is in control? Is the movement weakening? Has it reached an extreme? The candles answer those questions.