《A Beginner’s Guide to Using Candlestick Charts to Judge Price Movements》

The focus is not on prediction, but on teaching everyone how to judge the current balance of bullish and bearish forces from candlestick charts.
📈 How to Read Candlestick Charts to Judge Price Movements: A Simple Method
For many people, the first reaction when looking at candlestick charts is:
Buy when it turns red, sell when it turns green.

In fact, it is far from that simple.

The real value of candlestick charts is that they can tell us who has the advantage between buyers and sellers over a given period.

① Look at the real body first
A candlestick mainly shows four prices:
The opening price, closing price, highest price, and lowest price.

If the closing price is higher than the opening price, it means the period ended higher overall; otherwise, it means a decline.

But do not look only at the color; pay more attention to the size of the real body.

The larger the real body, the more intense the battle between bulls and bears usually was during that period.

② Then look at the upper and lower shadows
Shadows are actually quite interesting.
Long upper shadow:

The price once surged very high, but was eventually pushed back down by selling pressure.

If long upper shadows appear consecutively, be alert to selling pressure above.

Long lower shadow:

The price once fell significantly, but was eventually pulled back up by buying pressure.

If a long lower shadow appears near important support, pay close attention to whether there is capital absorbing the selling.

③ Consecutive gains do not necessarily mean the price will continue rising
For example, BTC prints several bullish candlesticks in a row:
The first rises on increased volume
The second continues rising
The third surges before pulling back
The fourth forms a long upper shadow

At this point, you cannot simply interpret it as:

“It has been rising all along, so keep buying.”

Instead, you should start observing:

Is the upward move getting weaker?

If the price reaches new highs while trading volume continues to shrink, this situation is worth watching carefully.

④ Declines must also be judged by how they occur
The same decline can have completely different meanings.
A sharp decline on heavy volume:
It indicates that selling pressure has clearly increased.

A decline on light volume:
It may simply mean that market participants are reluctant to sell, and does not necessarily mean the trend has completely turned bearish.

A break below support followed by a quick recovery:
You need to observe whether a false breakout has occurred.

Therefore:

Do not look only at whether prices are rising or falling; look at the forces behind the movement.
⑤ Candlestick charts must always be considered in context
The same candlestick can have completely different meanings depending on where it appears.
A long lower shadow at the bottom may represent buying support.

A long upper shadow at a high may represent selling pressure.

A large bullish candlestick after breaking through a resistance level indicates that the bulls may be gaining strength.

But if the price immediately falls back into the previous range after surging, be alert to a false breakout.

Candlestick charts cannot be viewed independently of their position.

⑥ The simplest way to judge
If you are just starting to learn, you can observe only these things each day:
Price → Trend → Support and resistance → Trading volume → Candlestick patterns

Then ask yourself three questions:

Is the current market in an uptrend or a downtrend?
Is buying pressure strengthening or weakening?

Is this a position worth chasing, or should you wait?

This is more practical than simply studying dozens of candlestick patterns.
Finally, remember one thing:

Candlestick charts are not crystal balls; they cannot tell you whether the price will definitely rise or fall tomorrow.
They can only help you see clearly the current balance of bullish and bearish forces in the market.

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