I noticed that many people starting out in technical trading overlook one fundamental thing: knowing how to read candles. It's a shame because it really changes the game for identifying opportunities in the market.

So here it is, a candle is simply a way to visualize how the price of an asset moves. The candlestick chart has become the basic tool in technical analysis precisely because you can quickly interpret price information by just looking at a few bars. Each candle has three key elements: the body, which shows the range between the open and close, the wicks (or shadows), which indicate the daily highs and lows, and the color, which reveals the market direction — green for an increase, red for a decrease.

What’s interesting is that when you observe multiple candles together, they form patterns that you can use to recognize key levels. Some types of candles signal the balance between buyers and sellers, others define continuation patterns or show market indecision. That’s why, before really trading, you need to familiarize yourself with these basics.

As a concrete example, the Hammer is a classic pattern: a small body with a long lower wick during a downtrend. It shows that sellers pushed the price down, but buyers brought it back up. It’s a nice bullish signal. Conversely, you have the Hanging Man, which has the same shape but forms after an uptrend — it’s the equivalent bearish signal.

There are also more complex patterns like the Bullish Engulfing (two candles where the second green completely engulfs the first red) or the Morning Star (three candles indicating a reversal after a decline). For trading, these patterns are super useful because they give you potential entry points.

But here’s the important thing: a single candle type is not enough. You always need to combine candle analysis with other forms of technical analysis to confirm the overall trend. That’s the best approach to avoid false signals.

My recommendation? Start practicing on a demo account. Open and close positions based on the signals you see, without real risk. It allows you to develop your intuition before actually trading with real money. Once you master reading patterns and understand how each candle type behaves, you can move to a real account.

Technical trading is a skill that can be learned. Take the time to really understand how candles tell the story of the market, and you’ll see it becomes a valuable tool in your strategy.