Japanese Candlesticks: How to Read the Market through Charts

If you are trading crypto but only understand charts at the level of “green arrow up is good”, it's time to get serious. Japanese candles are not some mysterious magic from the 18th century, but just a way to visually represent what the price has done over a certain period.

How is a candle structured?

Each candle tells the story of the battle between bulls and bears:

The real body is a rectangle in the center. If the price closed higher than it opened - the body is white/green (bulls win). Below - black/red (bears in control).

Shadows (wicks) — thin lines at the top and bottom. The upper shows the maximum, the lower — the minimum price during this period. If the shadow is long, it means there was a rebound from the extreme.

Why does this work?

✓ One candle = four prices (open, close, max, min) — the complete picture at once ✓ It is clear not only the direction but also the strength of the movement ✓ Easy to notice trends and reversals ✓ Works on any timeframe from 1m to a month and for any assets

What to watch first?

Hammer — a small body + a long lower wick. Usually indicates that bears tried to push the price down, but failed. Potentially — a bottom and a rise upwards.

Falling Star is the opposite of the hammer. Bulls tried to raise the price, but it fell. It may signal a downward reversal.

Doji - almost without a body, like a cross. The market is in a stupor, no one is sure. Often precedes sharp movements.

Engulfing (Engulfing) — when one candle completely engulfs the previous one in size. This is a signal of trend reversal.

How not to step on a rake?

1. Don't trust a single candle — look at the context. One green candle during a decline is not yet a trend.

2. Combine with other tools — support/resistance levels, moving averages, volume. Candles are the language of the market, but not the whole story.

3. Practice on historical charts — learn the patterns until you can see them reflexively.

4. Remember the context — a hammer works differently in an upward trend than in a downward trend.

Conclusion

Japanese candlesticks are a basic yet powerful tool. They do not guarantee profit, but they allow you to read the market like an open book. Learning to interpret the candles + combining with analysis = the chances of success rise exponentially.