I recently organized some knowledge about candlestick reversal signals and found that many people’s understanding of candlesticks still stays at a superficial level. Our domestic stock market has been using candlesticks since it opened in 1990, but frankly, the systematic research on candlesticks has not been in-depth enough, mostly still relying on old Japanese studies, with scattered statistics and no formation of a complete pattern.

Candlestick charts are also called yin-yang candles, originating from rice market trading during Japan’s Tokugawa shogunate era, and later introduced into the stock market. Its greatest advantage is being intuitive and highly three-dimensional, capable of relatively accurate prediction of future market directions, and also useful for judging the comparison of bullish and bearish forces. But here I want to emphasize one point: indicators and candlesticks are just reference tools; conclusions should not be drawn uniformly. Actual trading still requires specific analysis based on the situation.

There are 48 types of candlesticks, 24 bullish and 24 bearish. Simply put, the larger the real body of a bullish candlestick, the stronger the buying pressure, and the more likely the market will rise. A long lower shadow indicates strong buying, while a long upper shadow indicates strong selling. Conversely, for bearish candlesticks, a large real body indicates strong selling pressure and a potential decline, while a long lower shadow suggests strong buying.

I think the most practical are a few candlestick pattern combinations. The Morning Star appears at the end of a decline; the three-day pattern consists of a long bearish candle, a gap cross, and a long bullish candle, which signals a bottom reversal. The Evening Star is just the opposite; it appears during an uptrend and is a clearer reversal signal, often an excellent selling point.

The Three White Soldiers are three consecutive bullish candles, each closing higher than the previous day; this candlestick reversal signal generally indicates a bullish outlook. The Three Black Crows are its opposite: three consecutive bearish candles, gradually declining, indicating the stock price may further fall. The Gap Three Soldiers is quite interesting; it appears at the top, first with a long bullish candle continuing the rise, then two days of gap-up opens but closes lower, indicating the bullish momentum is weakening and warning of a potential island reversal.

Honestly, technical analysis is a game of probabilities; there are no 100% accurate candlestick reversal signals. But mastering these pattern combinations, combined with volume and other indicators, can indeed improve judgment accuracy. Many people only look at a single candlestick, but in fact, the pattern combinations are the key. That’s also why systematic learning of candlesticks is important. If you're interested, you can observe candlestick movements of various cryptocurrencies in real-time on Gate, practice matching these patterns, and over time, develop a good market sense.