I noticed that many beginner traders overlook a truly fundamental tool: correctly reading candlestick patterns. It’s actually THE foundation for understanding what’s happening on the charts.

So here it is, each type of trading candlestick tells a story. The body shows the gap between the open and close, the wicks indicate the highs and lows of the day, and the color tells you whether buyers or sellers had the upper hand. It’s simple but powerful.

What interests me most is how these individual candles form patterns that you can really leverage. Not just to predict, but to identify the true support and resistance levels.

Let’s start with bullish signals. The Hammer, for example, is a small candle with a long lower wick that appears after a decline. It shows that sellers tried to push lower but buyers regained control. The Inverted Hammer is the same idea but upside down: long wick upward, buyers test but sellers push back. Then you have the Bullish Engulfing, two candles where the second green completely engulfs the first red. That’s a pretty clear reversal. The Piercing Line works similarly but slightly different: a red followed by a green that rises up to half of the first. The Morning Star, which is my favorite for reversals: three candles with a small one in the middle between a large red and a large green. And then the Three White Soldiers, three consecutive days of green candles gradually rising. That’s a very strong signal.

Now, bearish patterns. The Hanging Man looks like the Hammer but forms after an uptrend. It signals that sellers are regaining ground. The Shooting Star is like an inverted Hammer but in an uptrend. The price reaches the intraday high then closes almost at the open level. The Three Black Crows, three consecutive red days where each close is lower. Sellers are clearly in control. The Bearish Engulfing, a small green swallowed by a large red. And the Black Cloud Cover, a red opening above a green but closing below the midpoint. Quite a dramatic reversal.

Next, you have continuation patterns that show periods of indecision. The Doji, when open and close are almost at the same level, creating a cross. Buyers and sellers are neutralized. The Spinning Top looks like a Doji but with a small body in the center and balanced wicks. The Three Methods, bullish and bearish, are more complex: they show that the current trend will probably continue even if there’s a small resistance.

The important thing is that each type of candlestick pattern doesn’t work alone. You need to combine them with other technical analyses to confirm what you see. It’s not an exact science but a matter of probability.

My recommendation? Open a demo account and practice recognizing these patterns in real time. You’ll quickly learn to read signals and identify the real entry and exit points. Over time, it becomes natural and you can truly leverage technical trading on any market.