I just realized that many people are still confused about reading forex candlesticks, so I want to share our understanding. Because in fact, if you understand the basics, it will help make trading much smoother.

Candlesticks are what we see on every trading platform, consisting of open, close, high, and low prices within a specified period. A white (Bullish) candlestick appears when the closing price is higher than the opening, indicating buying strength. A black (Bearish) candlestick appears when the closing price is lower than the opening, indicating selling dominance. The top and bottom lines of the candlestick (the wicks) tell us how strong the price movement was during that period.

The reason we like to look at forex candlesticks is because they clearly show market sentiment. Unlike line charts, which can seem redundant. Candlesticks have patterns called Doji, which signal market hesitation. Marubozu is a full-bodied candlestick with no wicks, showing that one side is firmly controlling the market. Spinning Top indicates market indecision.

When we see a Hammer in a downtrend, it might be a sign that the market will reverse upward. A Hanging Man in an uptrend could suggest selling pressure is coming in. Inverted Hammer and Shooting Star are similar, just different shapes.

Once we understand single candlestick patterns, we move on to two-candlestick patterns. Bullish Engulfing is when a black candle is followed by a larger white candle, indicating a reversal from downtrend to uptrend. Bearish Engulfing is the opposite. Tweezer Tops and Tweezer Bottoms look like tweezers, suggesting the market might change direction.

After understanding these two patterns, let’s look at three-candlestick patterns. Morning Star is a reversal signal from downtrend to uptrend, consisting of a black candle, a small candle, and a white candle. Evening Star is the opposite. Three White Soldiers indicate strong buying. Three Black Crows show strong selling. Three Inside Up and Three Inside Down are also reversal signals.

What we learn is that forex candlesticks are not as complicated as they seem. Once you know the basic patterns and gain experience, you’ll be able to recognize signals better. But remember, K-line patterns are not 100% accurate. You need to consider the market situation as well to make good decisions.