How to Read Japanese Candles and Understand Market Movement

Japanese candles are a simple way to understand market movement, and each candle tells a story between buyers and sellers, from its shape you can estimate the potential direction.

1️⃣ Single Candle Patterns

Doji: Indecision and uncertainty, requires confirmation

Hammer: After a decline, buyers began to resist

Inverted Hammer: Beginning of buyer entry after a decline

Hanging Man: After an uptrend, buying strength decreases

Shooting Star: After an uptrend, potential weakness and beginning of a decline

2️⃣ Two Candlestick Patterns

Bullish Engulfing: Buyers in control

Bearish Engulfing: Sellers in control

Harami: Beginning of indecision in direction

Bullish Harami Cross: Selling pressure weakens

Bearish Harami Cross: Buyers hesitate

Tweezer Bottom: Potential reversal at the bottom

Tweezer Top: Potential reversal at the top

Piercing Pattern: Potential bullish reversal

Dark Cloud Cover: Potential bearish reversal

3️⃣ Three or more Candlestick Patterns

Morning Star: Potential upward movement

Evening Star: Potential decline

Three White Soldiers: Bullish momentum

Three Black Crows: Bearish momentum

Rising Three Methods: Continuation of upward movement

Falling Three Methods: Continuation of downward movement

💡 Alert:

Candles provide signals and probabilities only, not buy or sell orders

And it is stronger when aligned with the overall trend and support and resistance

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