Japanese Candlesticks: Your Hidden Superpower in Trading

Did you know that professional traders read the market as if it were a book? Japanese candlesticks are exactly that: the language the price speaks. Over 300 years ago, Japanese rice merchants already understood this. Today, it remains one of the most powerful tools in trading.

What Do You See in a Candle?

Each candle is simple but revealing:

• Body: What happened between open and close (green if it went up, red if it went down)
• Shadows: The highs and lows the price touched but rejected
• The Play: A long body = strength of buyers or sellers. Long shadows = market indecision

It’s like reading the market’s pulse in real time.

The Patterns That Matter

Reversal Patterns (the market is about to turn):

• Hammer: Small body, long lower shadow = sellers tried to push down, but buyers stopped it
• Doji: Almost no body = the market doesn’t know where to go, a potential change opportunity

Continuation Patterns (the trend continues):

• Flag: A small pause in the trend before it continues strongly
• Bullish Engulfing: A large green candle that “engulfs” the previous red one = we keep rising

The Formula That Works: MA + (Moving Average + Candles)

Don’t rely on just one tool. Combine:

1. Moving Average (MA 50 or MA 200) = the overall trend
2. Japanese Candles = confirmation for entry/exit
3. Volume = how credible the move is

Example: If the price crosses above the MA 50 + you see a bearish hammer + volume increases = this is a serious buy signal.

How to Win Big with This

1. Don’t improvise: Practice on a demo first (without real money)
2. Learn the patterns: Identify 5-6 formations and master them
3. Diversify confirmations: One candle + moving average + support/resistance = solid decision
4. Risk management: Always use a stop loss. If you lose 2% of your account, exit
5. Extreme patience: Wait for the candle to close before acting

The Uncomfortable Realities

✓ Candles are easy to learn but hard to master

✓ They are not magic predictions: they are probabilities

✓ Most fail because they rely 100% on candles without other indicators

✓ Trading requires discipline, not “quick luck”

The Final Key

Candles don’t make money. Your ability to read them, confirm with other data, and execute without emotion = that’s what makes money.

Study, practice, make mistakes on demo, learn, repeat. That’s how professionals work.

The candle is the tool. You are the one who decides whether to use it well.