Japanese Candlesticks: learning to read and understand🕯

✅Japanese candlesticks are the most popular way to read the price movement on charts. They are visual, easy to learn and the main thing is that they work.

✅The first mention of candle patterns can be found in the Japanese rice trader Homma Munehisa in the 1700s. Almost 300 years later, candles were rediscovered by Steve Neeson in his book titled "Japanese Candles. Graphical analysis of financial markets".

✅Candlestick charts provide much more information compared to linear charts and are currently the preferred market analysis tool for traders and investors.

What are Japanese candles?

🟢Each of the candles tells us four facts about itself: the opening price, the maximum price movement, the closing price, and the minimum price movement.

⏺A bullish candle is formed when the price rises. In financial markets, the term bullish means a long position or a buy.
⏺A bearish candle is formed when the price falls. In financial markets, the term bearish refers to a short position or sale.

❗️The body of the candle is the space between the opening and closing of the candle. If the body is green, it means that the closing price of the candle is higher than the opening price. If the color is red, it means the closing price is lower than the opening price of the candle.

❗️Candle wicks represent the highest or lowest points that the candle has reached.

🟢Each candle represents a selected time frame or time interval during which it opens and closes. For example, on a 4-hour chart, candlesticks open and close every 4 hours.

🟢If we line up several candlesticks, we can compare them with a linear chart. Candle wicks also show price fluctuations. Thus, we immediately get the maximum information that we need for effective market analysis.

⚠️A trader who knows how to analyze and interpret candlestick patterns or patterns already understands the actions of financial market participants a little better.

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