I noticed that many people who are just starting out in trading think that reading charts is complicated, when in reality, understanding candlestick patterns completely changes the game. It’s truly one of the fundamental bases of technical analysis that you need to master.

First, what exactly is a candlestick? It’s simply a way to visualize the price movement of an asset. Each candlestick represents a trading period—in this case, a day. It has three key elements: the body, which shows the range between the open and the close; the wick (or shadow), which indicates the highs and lows of the day; and the color, which tells you the direction—green or white for an up move, red or black for a down move.

Over time, these individual candlesticks form patterns. And that’s where it gets interesting for identifying support and resistance levels. Some patterns give you an idea of the balance between buyers and sellers, while others signal continuation or simply the market’s indecision.

Bullish patterns usually appear after a downtrend and can signal a reversal. The hammer is a good example—small body with a long lower wick, showing that despite selling pressure, buyers have regained control. There’s also the inverted hammer with a long upper wick, or the bullish engulfing, where a large green candle engulfs a small red candle. The morning star is a classic: three candles with a small one in between a long red candle and a long green candle, signaling a trend change. And then there are the three white soldiers—three consecutive green candles that rise gradually; this is a really strong signal.

On the bearish side, you have patterns that form after an uptrend. The hanging man looks like the hammer but appears at the top, indicating that sellers are taking over. The shooting star has a small lower part and a long upper wick—the price rises and then falls back down. The bearish engulfing is the opposite of the bullish one: a small green candle engulfed by a large red one. The evening star is the bearish counterpart to the morning star. The three black crows—three consecutive long red candles—clearly show that sellers dominate. Dark cloud cover also signals a bearish reversal.

But there are also continuation patterns that don’t signal a change in direction, but rather a period of calm or indecision. The doji, for example, is when the open and close are almost at the same level—a cross showing that no one really wins. The spinning top is similar: a small body in the center with equal-length wicks, indicating consolidation. The methods of the three bullish and bearish patterns show that the current trend is likely to continue.

The important thing to remember: even though these candlestick patterns are excellent for quickly spotting trends, you should always combine them with other forms of technical analysis to confirm what you’re seeing. The best approach is to practice on a demo account first, learn to read these signals without risk, before you actually trade in the market. With time and practice, you’ll develop real intuition for recognizing these patterns and using them wisely.