How to read a candlestick chart 🔍

Japanese candlestick charts have become the favorite tool of traders in 2025 🚀. They have left bar charts behind. They are clearer. They better show price information.

What is a candlestick chart? 📊

A candlestick chart visually shows how the price moves. Each candle has important data:

• Opening
• Close
• Maximum
• Minimum

They provide hints about the market. It seems they reveal secrets about possible direction changes. The time represented by each candle depends on what the trader chooses. The daily time frame is quite popular.

Anatomy of a Japanese Candle 🧩

To understand these candles, one must know their parts:

Opening price: The first traded price.

High price: The tip of the upper wick.

Low price: The end of the lower wick.

Closing Price: The last traded price.

The wick/shadow: Those thin lines that come out of the body. They show extremes.

Address: The color says it all. Green/blue means up. Red means down.

The range is simple: highest point minus lowest point.

Advantages over bar charts 💯

Candles are better. There's no doubt. They are more visual 👀. They show patterns that we wouldn't see as easily with bars.

Practical Interpretation of Candles 🧠

There are many ways to read candles. It depends on your strategy.

Significant individual formations 🔥

Candlesticks like the Hammer, the Shooting Star, or the Hanged Man say a lot about the market.

The Hammer usually indicates a reversal. It has a long wick below, a small body. It closes above. It suggests that there was an attempt to push the price down, but the buyers prevailed. Bullish signal 📈.

You can enter long after seeing this candle. Set a stop loss. Secure profits.

Patterns in multiple candles 🌊

Several candles together give strong signals. The Bullish Engulfing is a good example. A red candle, then a green one that "eats it." Perhaps the end of a downtrend.

The analyses of 2025 show that they work quite well. Especially if you manage the risk well 🛡️.

Application in trading strategy 🎯

Mastering these candles is crucial. It hasn't changed in 2025. The daily frames seem to yield good results, but it depends on your style.

Don't use these patterns alone. Combine them. They will help you find better entries and exits 🎯.

The real advantage is to quickly see what happens with the price. Notice the momentum. Anticipate changes. Fundamental things to win in this very volatile 2025 🌕.