Japanese candlesticks were introduced by the Japanese for rice trading. Today, they are often used for visualizing the price of an asset. The reason is that they provide in an intuitive way information like the low, open, close, and high price.
As prices represent the actions of market participants, some candlestick patterns can help you gauge the “sentiment” of the market. For example, a candlestick with a long lower wick could represent a situation where bears tried to push the price down but eventually failed to succeed. Hence, this may be a bullish indication.
There are many Japanese candlestick patterns including one, two, or three candlesticks. They also have very interesting names: harami, engulfing, one white soldier are just some of them. However, the important thing is not to memorize the names, but to understand the psychology behind the patterns and in which situation they are useful.
In the first video below you can find an introduction to Japanese candlesticks. This will clarify the different versions of the candlesticks you can find depending on the platform and settings. For example, a green candle may be bullish or bearish depending on the situation. After that, the other two vides present three bullish and three bearish Japanese candlestick patterns. If you have any question after watching the videos, write me a comment and I will be happy to answer!
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