Japanese candles: your secret weapon in crypto trading

Every trader worth their salt needs to master candlesticks. Why? Because it's literally the language of the market. While others are using complicated indicators, you can read what the price is screaming directly from the candlestick.

What does a candle tell you that other indicators do not?

Each candle is a round between buyers and sellers at a specific time. The body shows the open-close range, the wicks (shadows) reveal where the price was rejected. When you see a long wick up but a close lower, it means that buyers tried, but sellers won. That is pure market psychology.

The patterns that really work

Doji: open = close. Translation: the market doesn't know where it's going. Total indecision. After a strong trend, it is often a signal of reversal.

Hammer: small body + long lower shadow (in a downtrend). Sellers pressed, but buyers said “not happening”. Typical bullish reversal.

Shooting Star: the opposite. Appears in tops, with a long upper wick. Sellers regain control after the rally.

Engulfing patterns: A small candle engulfed by a larger one in the opposite direction. Change of sentiment from one day to the next. Very reliable when appearing at key support/resistance levels.

Morning and Evening Star: 3 candle patterns. Morning = bullish reversal (bearish + small + bullish). Evening = bearish reversal (opposite). They are powerful when they close with volume.

Three black crows vs three white soldiers

Three consecutive bearish candles = sustained selling pressure. Three bullish candles = buying momentum. They are not reversals; they are confirmations of a strong trend.

How to use them without ruining yourself trying

Here is the secret: candles alone do not win trades. You need:

1. Confluence of levels: reversal candle at support/resistance = x10 more reliable
2. Volume: bullish engulfing pattern with increasing volume = strong setup. Without volume = noise
3. Previous trend: a hammer in a downtrend is gold. The same hammer in the middle of a bullish rally is trap.
4. Other indicators: combines with moving averages, trend lines, RSI. A single tool does not make a plan.

Real example: BTC hits support, forms a doji at the close, the next day it goes bullish (hammer forming). Volume in green increasing. 200 moving average below holding. That's a signal to enter long, not just the candle.

The psychological trick behind

Candles work because they reflect emotion. Those sellers pushing on the upper wick? Fear. Those buyers intervening at supports? Greed. When you recognize these patterns, you recognize emotional cycles. And emotional cycles move prices.

Bottom line

Mastering candles gives you real-time market reading. But it's not magic. Always combine with context, levels, and volume. The best trader is the one who combines candles + technique + risk management. Without risk management, the most perfect candles will only lead you to bankruptcy faster.