Japanese candles help you analyze market movement, showing the opening price, closing price, highs, and lows.

1. Components of a Japanese candle:

Body:

  • Green (Bullish): If the closing price is higher than the opening price.

  • Red (Bearish): If the closing price is lower than the opening price.

Shadows:

  • Upper shadow: Highest price reached.

  • Lower shadow: Lowest price reached.

2. Types of candles:

Bullish Candles ✅

  • Green body.

  • Indicates upward trend.

  • Example: Closing higher than the opening.

Bearish Candles ✖️

  • Red body.

  • Indicates downward trend.

  • Example: Closing lower than the opening.

Doji Candles ⚖️

  • The opening and closing price is almost the same, showing indecision.

  • Signal of possible reversal.