Honestly, I've long wanted to understand why all traders focus specifically on Japanese candlesticks. It turns out the reason is simple — they truly provide the fastest visual understanding of what’s happening in the market. This is the foundation of technical analysis, and without understanding candlestick charts, you simply can't read the market properly.

The history is interesting. Japanese rice traders invented this system several centuries ago, but the West only learned about it in the late 80s when analyst Steve Nison popularized it. Since then, it has become the standard on all trading platforms.

So how do you read these candles? Each candle consists of three elements: color, body, and wick. The color indicates the direction (green — up, red — down), the body shows the range between open and close, and the wicks are the highs and lows for the period. Here’s where it gets interesting.

The length of the wicks relative to the body tells a lot. If the wick is long and the body is short — that’s uncertainty, a struggle between buyers and sellers. Conversely, if the body is long and the wicks are short or absent — that’s a decisive move in one direction. A long green body without tails means buyers completely controlled the period. A red body with the same pattern — on the contrary, sellers were in control.

Now about the candlestick patterns themselves. They are either reversal patterns or continuation patterns. Reversal patterns indicate a trend change, while continuation patterns suggest a temporary pause before the current movement resumes.

When it comes to single candles, here’s what you should know. Doji — when open and close are at the same level, forming a cross. This indicates pure indecision. Marubozu — a candle without wicks at all, opened at the low and closed at the high (or vice versa) — a very decisive pattern. Hammer — a long lower wick with a small body at the top, often signals buying pressure after a decline. Shooting star — an inverted hammer in an uptrend, a bearish signal.

Double patterns are more interesting. Engulfing — when one candle completely engulfs the range of the previous one in the opposite direction. The larger the engulfing, the stronger the signal. Piercing — after a long red candle, a long green candle appears with a gap upward. Usually, this indicates a reversal after a fall.

A key point: candlestick patterns work best on larger timeframes — daily, weekly, monthly. On minute charts, they can just be noise. Always wait for confirmation before opening a position. One hammer isn’t a buy signal by itself, but if a strong upward move follows the hammer — that already indicates something.

This is how candlestick patterns help traders identify key support and resistance levels. Over time, when you start recognizing these formations automatically, trading becomes much easier. The main thing is to practice on a demo account until you can identify them at a glance.