Recently organized some practical notes and found that many traders' understanding of candlesticks still remains superficial. Today I want to share a few insights that I only fully grasped after more than three years of experience.

First, it’s important to clarify: candlesticks are not predictions; they reflect the intentions of market participants. Retail traders often read candlesticks as if they were textbooks, but that’s the wrong approach. Those who truly make money do so by understanding the intentions of market participants before taking action.

The three most common pitfalls in trading practice:

**Fake Drop, Genuine Rise**
When the price breaks through a support level, retail traders often cut their losses en masse, while smart funds quietly accumulate. The key is to watch the closing price. If the 1-hour candlestick closes back above the support level, and during the breakdown there is high volume, but during the rebound volume decreases, this is a typical shakeout signal, often followed by a rally.

**The Trap of Volume-Price Divergence**
This is the easiest to lose money on. When the price hits a new high but trading volume shrinks, it indicates that the upward momentum is exhausted. Last year, I saw a mainstream coin repeatedly hit new highs on the daily chart, but the volume kept decreasing day by day. Eventually, a large bearish candle wiped out all previous profits within three days.

**The Truth About Consolidation Phases**
Horizontal movement may seem like rest, but in reality, it’s a decisive moment for winning or losing. A bottom consolidation accompanied by increasing volume indicates accumulation, with upward pressure gradually breaking through; a top consolidation with shrinking volume suggests the bulls are losing strength. If at this point you see a surge in open interest, it’s a sign that a storm is approaching.

Master these three patterns, and your trading mindset will become much clearer. Candlesticks will speak, but you need to listen with the right ears.