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If you are a trader in any financial market, you definitely need to know the secrets of Japanese candlesticks. There is no doubt that Japanese candlesticks occupy the top position among all price display systems on the charts of all financial markets.
This is because of their accuracy in displaying price action and their attractive appearance. But most importantly, Japanese candlesticks can be used as a tool for technical analysis. Yes, it is true, thanks to the candle formations that appear on the charts (called Japanese candlestick patterns) a trader can build a realistic picture of future price action.
However, many traders, especially beginners, do not use Japanese candlesticks and their patterns in the best possible way. This may be due to their lack of knowledge of many of the secrets of Japanese candlesticks.
Technical analysis experts agree that every candle and every Japanese candlestick pattern hides a story that every trader and technical analyst should read carefully in order to be able to read the price movement!
In this article, we will learn some of the secrets of Japanese candlesticks that will greatly benefit us in improving our use of this approach. We will start by presenting a brief overview of the definition of Japanese candlesticks, their characteristics and advantages. Then we will learn how to use Japanese candlesticks in trading, and take a look at their types and effects. Finally, we will learn about 10 of the most important Japanese candlestick secrets for every trader and technical analyst.
First: What are Japanese candles?
Japanese Candlesticks: It is a method or tool for displaying price action on financial market charts. In addition, Japanese candlesticks are also used as a technical analysis tool.
The reason for this is that Japanese candlestick charts display each trading session as a candle, and by analyzing and reading these candles, traders can deduce a lot of important information about the session.
For example, let's say we are analyzing a stock chart on the daily time frame, each candle on the chart represents one day. Just by looking at any day's candle, we can immediately know: the opening price, the high price, the low price, the closing price for that day.
The same applies to all time frames, whether weekly, monthly, or even intraday frames; such as the hourly, 15-minute, and others.
The importance and features of Japanese candles
As is well known, Japanese candlesticks have countless advantages, one of which is that they help determine the main direction of the price.
It also helps traders build an idea about the future price direction, and accurately and objectively identify reversal points. All these advantages - and others - can be deduced by reading the candle, i.e. analyzing the shape of the candle itself.
Knowing that each candle has a specific indication of the price action. That is why it is said: “Behind every candle is a story; if you can read this story correctly, you will know where the price is going”! Perhaps this is one of the secrets of Japanese candlesticks, which we will discuss later.
The famous expert Steve Nison is credited with borrowing Japanese candlesticks from the Japanese and transferring them to the world, through his book “Japanese Candlestick Charting Techniques”, which was first published in 1991.
Anyone who wants to understand the nature and logic of price action should read this book. Not only does it describe the types of candlesticks and Japanese patterns, it also explains how to combine Japanese candlesticks with other technical analysis tools to capture the best trading opportunities.
The illustration below shows us all the information that Japanese candlesticks - both bullish and bearish - provide us with about the price movement:
Figure No. (1): A diagram of bullish and bearish Japanese candlesticks.
Second: How to read Japanese candlesticks
If you are using Japanese candlestick charts in your trading, you must first know their formations. In general, these formations are known as “Japanese Candlestick Patterns”.
Japanese candlestick patterns are candle formations that appear on charts, revealing a certain price behavior that has led to a certain result in the past. These patterns are divided into three types, which are:
Single Candlestick Pattern (consists of only one candle). Double Candlestick Pattern (consists of two candles). Triple Candlestick Pattern (consists of three candles).
Japanese candlestick patterns are divided - in terms of their effects on price movement - into two main sections, which are:
Continuation Patterns (indicate the possibility that the price will continue moving in the prevailing trend). Reversals Patterns (indicate the possibility that the price trend will reverse from bullish to bearish or vice versa).
It is also worth noting that these models include many secrets of Japanese candlesticks, as each model must be coupled with other indications, signals and criteria that confirm its suitability for trading.
Now let's move on to the most important point.
Third: Secrets of Japanese Candlesticks
As mentioned earlier, behind each candle there is a story that must be read carefully in order to be able to read the price movement. One of the most important secrets of Japanese candlesticks is the trader’s ability to:
Correctly identify the Japanese candlestick pattern and its effects. Determine the importance of where the pattern is formed.
For example, there is no doubt that the Doji candle is a common and easily recognizable reversal candle. However, the position of this candle on the chart is the key to its effectiveness.
Hence, it can be said that the success of the pattern depends mainly on the location of its formation; if it forms near a major support or resistance level, there is a high probability of its success.
Let's now discuss some of the secrets of Japanese candlesticks in some detail.
1- Focus well on the Japanese candlestick reversal patterns.
There is no doubt that Japanese candlestick patterns, whether reversal or continuation, are an effective tool for predicting the direction of price movement. However, reversal patterns are considered more effective than continuation patterns for two main reasons:
Japanese candlestick reversal patterns are easy to identify accurately on charts. Reversal patterns provide us with more accurate and reliable trading signals.
Therefore, we should give utmost importance to looking for Japanese candlestick reversal patterns, and then seize the best trading opportunities resulting from them.
Identifying reversal points in the price trend is every trader's dream, and Japanese candlestick reversal patterns will help us a lot in that.
The chart below shows some examples of Japanese candlestick reversal patterns and how easy they are to spot:
Figure No. (2): Examples of some Japanese candlestick reversal patterns.
From the chart above we can see that the price trend changed completely from bullish to bearish or vice versa about six times. And every time this change in trend was accompanied by a reversal candlestick pattern!
Starting from the left, we find a pin bar candle that changed the price direction from bullish to bearish. Then, a bullish engulfing pattern appeared, which changed the trend to bullish again. This was followed by a bearish cumulus pattern, which changed the trend back to bearish.
At the lower support level, the “Jewelry Hole” (bullish) pattern appears - the opposite of the cumulonimbus cloud pattern, which contributed to changing the price trend to an upward one.
This was followed by a Doji candle that changed the trend to bearish again. Finally, a Hammer candle (bullish) came that pushed the price to a strong rise.
Also notice how easy it is to spot candlesticks and reversal patterns, and how they often form near key support and resistance levels on the charts.
Their appearance at these important levels is an additional confirmation of the strength of the trading signal generated by the candle or pattern.
2- Two main conditions for trading on Japanese candlestick patterns
Speaking of the secrets of Japanese candlesticks, there are two basic conditions that must be present in any candle or pattern, which are:
Correctly interpret the shape of a candle or Japanese candlestick pattern. Determine the previous direction of the formation of this candle or pattern.
In other words, before trading using a Japanese candlestick pattern, we must be aware of the type of pattern it is (is it a single, double or triple pattern?), and its effects on price action (is it a reversal or continuation pattern?).
Then determine the previous direction of the pattern formation, which means:
If a reversal candlestick pattern forms at the end of an uptrend, the trend is likely to reverse to a downtrend. Conversely, if a reversal candlestick pattern forms at the end of a downtrend, the trend is likely to reverse to an uptrend. If a continuation candlestick pattern forms during an uptrend, the trend is likely to continue to an uptrend. Conversely, if a continuation candlestick pattern forms during a downtrend, the trend is likely to continue to a downtrend.
Remember: if one of the two conditions is met without the other, it is absolutely not enough to get a highly accurate and reliable trading signal.
– Accurately determining the price direction is one of the most important secrets of Japanese candlesticks.
From the above explanation we conclude that it makes no sense to look for a bullish reversal pattern during an uptrend. Similarly, when the trend is down; why look for a bearish candle or a bearish reversal pattern?
The search for candlesticks and Japanese reversal patterns must be conducted in the context of the prevailing trend, meaning:
If the trend is up, we should look for a bearish candle or reversal pattern, especially near resistance levels. Conversely, if the trend is down, we should look for a bullish candle or reversal pattern, especially near support levels.
Therefore, if we can accurately identify the trend, and correctly identify the candles or reversal patterns that appear at support and resistance levels, we will achieve great results.
For example, in the chart below we have two bullish engulfing (reversal) patterns. The first pattern is a good bullish engulfing pattern and can be traded.
While in the second case, although the price formed almost the same pattern, it is not considered a bullish engulfing pattern, why?
Figure No. (3): The bullish engulfing pattern and its formation position on the chart.
The answer is simple: because the first bullish engulfing pattern was actually formed at a support level at the end of a clear downtrend. Since engulfing patterns are reversal patterns, it is likely that the trend will reverse after the pattern is formed from bearish to bullish.
While the second bullish engulfing pattern was formed during an uptrend, i.e. it was not preceded by a clear downtrend, and therefore has no value. In this (second) case, the pattern should be ignored as if nothing had happened!
Again: the success of any candlestick pattern – especially reversal patterns – depends on the position in which it forms. This is where support and resistance levels and trend lines come into play, which we will discuss in detail later.
3- Spotting Japanese candlestick reversal patterns on larger time frames
You should always check the nature of price action on the larger time frames, i.e. daily, weekly and monthly.
This is one of the most important secrets of Japanese candlesticks, because the reversal candlestick patterns that form on these major time frames can provide us with reliable evidence of the future price direction.
Even if you are trading in the short term, you should check the daily frame at the end of each day, the weekly frame at the end of each week, and the monthly frame at the end of each month, and look for reversal signals.
This way you will get an excellent initial idea of the price direction in the next week or month. Then you can trade in the same direction in the short term.
In other words, let's assume that a bullish reversal candle (let's say a hammer candle) is formed on the weekly chart. In this case, we expect the price trend to change from bearish to bullish. Therefore, we can look for bullish signals on smaller time frames.
The chart below is for the monthly frame, from which we can extract some reversal Japanese candlestick patterns:
Figure No. (4): Some Japanese reflective models and candlesticks on the monthly frame.
From the chart above we can see that every reversal pattern formed on the monthly frame was followed by an actual reversal of the price trend.
Therefore, we can exploit these patterns that form on the larger time frames, and seize the best trading opportunities (in the direction of the reversal) on the smaller time frames.
For example, a shooting star (bearish) candlestick was formed on the monthly time frame of this market. Going down to the daily time frame we can get a lot of strong and reliable sell signals.
As the example itself shows, each candle or reversal pattern is often followed by a change in trend on the monthly chart. Note that these seemingly small moves on this chart produce sharp price movements on the smaller charts.
4- Doji candle: It includes many secrets of Japanese candles.
Despite its small size and easy to recognize, the Doji candle holds many secrets. First of all, it should be remembered that the Doji is a single reversal candle, characterized by a very small body (often the opening price is the same as the closing price or very close to it).
However, the position of the doji formation is the key to successful trading with it. This means that:
If a doji candle forms at an important support level, it can be a good buy signal. If a doji forms at an important resistance level, it can be a sell signal.
Therefore, if a doji candle appears during a strong trend (away from any support or resistance level), or while the price is moving within a sideways range, we should not consider it a trading signal until it is confirmed.
On the other hand, if a doji candle forms during a strong downtrend, additional confirmation should be obtained before trading on it.
This confirmation may come from price action, such as a strong bullish candlestick after a doji, or from an oscillator forming a bottom or being in oversold territory.
The chart below shows some examples of a Doji candle with an oscillator (MACD):
Figure No. (5): How to determine the effectiveness of the Doji candle based on where it appears.
As we can see from the chart above, if a Doji candle appears at a strong resistance level, it can be considered a good sell signal.
The same applies if it appears at a strong support level, it can be considered a buy signal. Otherwise, the Doji candle should be paired with additional confirmations, such as a candle close in the new direction, confirmation of a technical indicator, or a break of a trend line.
Also notice that each Doji candle that changed the price direction was accompanied by a crossover of the MACD lines below. See how the indicator lines crossed down and up as the influential Doji candles appeared.
Finally, we note that Doji candles that form within uptrends and downtrends are often ineffective. In any case, in order to confirm the effectiveness of the Doji, we must wait until the next candle closes.
5- The effect of the pin bar candle on the market
The Pinbar candle is one of the most famous Japanese candles, and is characterized by its long tail that sometimes exceeds the length of its body. The Pinbar candle usually indicates a state of “exhaustion” that the market has reached.
In other words, the appearance of this candle indicates that bears (sellers) are in conflict with bulls (buyers) to control the market during an uptrend, and the opposite during a downtrend.
Moreover, if the appearance of a single pin bar candle is considered an indication of a reversal in the price trend, what is the case when more than one pin bar candle appears within a short period of time?!
This is a clear indication of high volatility in the market. Therefore, the likelihood of an imminent trend reversal may increase.
The chart below shows us the effect of the appearance of several pin bars on the reversal of the price trend:
Figure No. (6): The effect of the appearance of consecutive pin bar candles on the price movement during the upward and downward trend.
In the chart above we have three examples of a “cluster” of consecutive pin bars. In the first and second cases (from the left) the pin bars were followed by strong bullish reversals.
In the third case, a group of pin bars formed at the end of an uptrend, and immediately after that the price trend reversed from bullish to bearish.
However, we must be patient until the pin bar candles are confirmed. This requires waiting for a candle to close in the opposite direction to confirm that these candles are valid for trading, and to also confirm that the high volatility phase that prevails in the market due to these candles has ended.
6- Focus well on the color of the hammer and shooting star candles.
The Hammer candlestick has an attractive appearance on the charts, as it looks like a “hammer” with a small body and a relatively long tail. It also contains some of the secrets of Japanese candlesticks.
The hammer candle is a bullish reversal candle, meaning that it appears at the end of a downtrend that turns into an uptrend.
On the other hand, the Shooting Star candlestick is the opposite of the Hammer candlestick (both candles have the same shape). However, the Shooting Star is a bearish reversal candlestick, meaning it appears at the end of an uptrend that turns into a downtrend.
It is common that the color (direction) of the hammer candle is not important, meaning that it is a reversal candle in all cases, as it can be bearish (red) or bullish (green) at the end of any trend. The same applies to the shooting star candle. However, experiments have proven that:
The hammer candle is more reliable and effective when it is bullish (green) at the end of a downtrend, and then it strengthens the buy signal. Similarly, the shooting star candle is more reliable and effective if it is bearish (red), and then it strengthens the sell signal.
The chart below shows an example of how the color of the Hammer and Shooting Star candles affects their effectiveness in trading:
Figure No. (7): The effect of the green bullish hammer candle and the red bearish shooting star candle on the price direction.
In the chart above we have two examples: the first - from the left - is a hammer candle, which formed at the end of a downtrend and was bullish (green). The second is a shooting star candle, which appeared at the end of an uptrend and was bearish (red).
In such cases the trading signal is stronger, as the green hammer indicates that buyers have actually entered the market and are able to prevent the price from falling further. This confirms to us that the candle closes on the upside.
In contrast, a red shooting star candle indicates that sellers have succeeded in preventing the price from rising further and are controlling the trading session. This is confirmed by the candle closing down, thus increasing the probability of the trend changing to down.
7- Some Japanese candlesticks need confirmation before trading using them.
There is no doubt about the power and effectiveness of Japanese candlesticks. However, one of the secrets of Japanese candlesticks is that most of these candles or patterns (especially reversals) need additional confirmation before trading using them.
Among the most famous candlesticks and reversal patterns that need confirmation before trading on them, for example, we mention:
Hanging Man Candle: It is a candle characterized by a small body and a long lower tail, and it always appears at the end of an uptrend. Harami Pattern: It consists of two candles, the first long in the main price direction, and the second small, located entirely within the range of the first candle. - Hanging Man Candle
When the price forms a hanging man candlestick, we should not open any sell trades until we get additional confirmation. As mentioned earlier, confirmation may come from price action (such as the appearance of a candle in the new direction), or from technical indicators.
The chart below shows an example of a hanging man candlestick with confirmation from price action and a technical indicator:
Figure No. (8): Hanging man candle with additional confirmations from price action and the Stochastic indicator.
From the previous chart, we notice that the hanging man candle was confirmed by a bearish candle immediately after it.
At the same time, a bearish crossover occurred on the Stochastic indicator, which was in the overbought area, and quickly exited it to the downside, coinciding with the confirmation candle.
Thus, we have the necessary confirmations to enter a reliable sell trade based on the Hanging Man candle.
- Harami model
The Harami pattern (both bullish and bearish) should be treated in the same way, as confirmation must be obtained before trading on it.
This confirmation (for a bearish Harami pattern) is a candle close below the low of the second candle of the pattern. The opposite is true for a bullish pattern, where a bullish candle closes above the high of the second candle of the pattern.
The chart below is an example of a bearish and bullish Harami pattern with confirmations from price action and a technical indicator:
Figure No. (9): Confirming the effectiveness of the Harami pattern from the price movement and the Stochastic indicator.
In the chart above, the bearish Harami pattern was initially formed at a strong resistance level. However, it would have been better to have additional confirmation in the form of a candle closing below the low of the last candle of the pattern.
Moreover, we notice a bearish divergence on the Stochastic indicator, with the two indicator lines crossing and exiting the overbought area to the downside. All of these were confirmations of the strength of the Harami pattern and its validity for trading.
In the second case we see that the price has formed a perfect bullish Harami pattern, right at a key support level. However, we may prefer to look for additional confirmations of the strength of the pattern.
These confirmations came from the price action, as the confirmation candle closed bullish and broke the high of the second candle of the pattern. In addition, we notice a bullish divergence forming on the Stochastic indicator, which had just exited the oversold zone.
All these signs were great confirmations of the strength of the bullish Harami pattern, and therefore the possibility of taking a reliable buy trade.
8- Look for evidence that confirms the strength of the trading signals on Japanese candles.
As we have already mentioned, one of the most important secrets of Japanese candlesticks is to pair them with reliable evidence that confirms their signals. The best evidence of all comes from the candles or patterns themselves.
For example, engulfing patterns are stronger and more effective if there is a large difference in size between the two candles that form the pattern, meaning that the first candle in the pattern is much smaller than the second (engulfing) candle, so that the last candle appears to “engulf” the first candle completely.
Note that the larger the candles, the stronger the trading signal.
The chart below shows an example of the effectiveness of the bearish engulfing pattern when the engulfing candle is strong:
Figure No. (10): An ideal bearish engulfing pattern.
In this example, first notice the large size of the two candles that formed the bearish engulfing pattern.
On the other hand, the second “engulfing” candle was much larger than the first candle, indicating the strength of the pattern. Indeed, the price pushed down sharply as soon as the second candle closed.
Another example: If the middle candle in a Morning Star or Evening Star pattern is a Doji candle, the pattern is more powerful and reliable.
It is also preferable that there is a small price gap between this doji (the middle one) and the first candle, or between the second and third candle in the pattern.
The chart below is of an Evening Star pattern, where the middle candle is a Doji, with price gaps:
Figure No. (11): Evening Star “Doji” pattern, with price gaps between the candles forming the pattern.
In this example, the price formed a bearish triple evening star pattern, and the middle candle was a doji. In addition, there were price gaps between the first and second candles, and between the second and third candles.
So we got a solid proof of the strength of this pattern, which was confirmed by the strong decline that followed.
9- Integrate candlestick patterns signals into technical indicator signals.
Look for candlestick patterns that match signals from technical indicators. The most important and effective of these indicators are:
Momentum Indicators: such as MACD, Stochastics, and RSI. Moving Averages.
For example, if a bullish reversal candlestick pattern forms at an important bottom, and this is coupled with the momentum indicator (say Stochastic) forming a bottom, or at a reliable moving average.
In such a case the buy signal generated by these signals is quite reliable.
Also, if the reversal pattern is combined with divergence on one of the momentum indicators, we have very strong and reliable trading opportunities (refer to Figure 9).
The chart below shows how a bullish engulfing pattern forms at the 200 moving average:
Figure No. (12): Supporting the bullish engulfing pattern signal with moving averages and a momentum indicator.
In the chart above we see a perfect bullish engulfing pattern forming, right at the 200 period SMA.
Moving averages in general, especially long-term ones, are known to act as support and resistance levels on charts. So we had a bullish reversal pattern at a reliable support level.
In addition, looking at the Stochastic indicator below, we see that it has just exited the oversold zone, with a bullish crossover of its lines, and this also coincided with the formation of a bullish engulfing pattern at the long-term moving average.
So we had a confirmed buy signal that proved to be very effective, as is clear from the example above.
10 - Use support and resistance levels
Trend lines with Japanese candles
One of the most important secrets of Japanese candlesticks is the use of trend lines and support and resistance levels.
In general, as we have explained in several previous places, trading signals generated by a reversal candle or Japanese candlestick reversal pattern are more reliable if they form at a major support or resistance level on the charts.
This means that you have two trading signals at the same time, the reversal candlestick signal or Japanese candlestick reversal pattern, and the signal resulting from the price being at a support or resistance level.
Keep in mind that support and resistance levels should be the foundation on which successful candlestick trading is built.
This is because it determines the range in which the price moves, and the levels that it may penetrate or bounce from, up or down. In general, if a reversal candle or reversal pattern appears at a support level, it represents a strong buy signal.
If a reversal candle or reversal pattern appears at a resistance level, it represents a strong sell signal. The chart below illustrates the strength of the trading signal resulting from a bullish engulfing pattern forming at a key support level:
Figure (13) A bullish reversal engulfing pattern is formed at a major support level on the chart. The chart shows a perfect bullish engulfing pattern at a major support level.
In such cases you will not need further confirmations before entering a buy trade, as we can take it as soon as the second engulfing candle of the pattern closes.
Trend Lines The same applies to trend lines, which are a very important technical tool for every trader. Trend lines are especially useful when trading single, double and triple candlestick reversal patterns. This includes, for example, Doji, Hammer, Hanging Man, etc., as well as bullish and bearish engulfing patterns Harami, Morning Star, Evening Star, Three Soldiers, Three Crows, etc.
The question that arises is: Are trend lines (diagonal) considered an effective tool to the same degree as support and resistance levels (horizontal)?
The answer is yes, as trend lines play a pivotal role in determining the price direction. Also, through them we can seize great and reliable trading opportunities.
This brings us to how to use trend lines in our candlestick trading.
Trend lines are used here in two different ways:
- The first method
The formation of the last candle in the pattern (either the second candle in double patterns, or the third candle in triple patterns) often coincides with the break of an important trend line on the chart.
Sometimes the trend line is broken by the candle immediately following the pattern. In both cases we have a great trading signal and in the forest of strength and reliability.
The chart below shows an example of the completion of the bearish Three Crows pattern coinciding with a trendline break.
Figure (14) The formation of the bullish three soldiers pattern coincided with the break of the trend line.
In the example above, first notice that we have correctly drawn an upward trend line, connecting two clear bottoms on the chart, then notice how the price broke this line downwards. In classic trading methods, simply breaking an upward trend line and closing below it is a good sell signal, so what if this signal is supported by a strong bearish reversal pattern?
- The second method
The second way to use trend lines with candlesticks is to look for candlesticks or candlestick patterns to bounce off the trend lines, and then enter into trades with a high probability of success. For example, in the chart below we have an uptrend line, and the price has bounced off it more than once. In almost every one of them we see that the price has formed a reversal candlestick pattern.
Figure (15) shows the price forming some reversal Japanese candlestick patterns when it bounces off the trend line.
As we can see from the chart above, every time the price bounces off the uptrend line it is accompanied by the formation of a reversal candle such as a hammer or pin bar, or a reversal pattern, such as a bullish engulfing.
The idea here is to combine two very powerful and reliable tools, each confirming the other. A trend line (like support and resistance levels) tells us the direction of the price in the long term.
While candlesticks or Japanese reversal patterns may tell us about the next price movement in the short term.
In such cases we have great and highly reliable trading opportunities. Keep in mind that trading using Japanese candlesticks alone without additional technical tools is risky.
Therefore, we must always and forever support the resulting trading signals with additional confirmations, whether from price action, support and resistance levels, trend lines, or technical indicators such as trend, oscillator or momentum indicators).
In this way, we have benefited from the most important and influential secrets of Japanese candles.
- Important note: What is presented here are just examples, as Japanese candlesticks include many of these secrets. Therefore, if you want to master trading with Japanese candlesticks, we recommend that you read Steve Nison’s book that I mentioned earlier.
Conclusion:
In this article, we learned about the secrets of Japanese candlesticks. Despite the great value of Japanese candlesticks and their importance in technical analysis of price movement, many traders do not use them optimally.
Japanese candlesticks are a method or tool for representing price movement on financial market charts.
- The famous expert Steve Nison is credited with introducing Japanese candlesticks to the world, through his book “Japanese Candlestick Techniques”.
- Every candle and every Japanese candlestick pattern hides a story, which every trader and technical analyst should read carefully in order to be able to read the price movement correctly.
Every trader should know about Japanese candlestick formations, which are known as Japanese candlestick patterns.
These models are divided into three types:
1- Single Japanese candles (one candle).
2- Double Japanese candlestick patterns (consisting of two candles).
3- Triple Japanese candlestick patterns (consisting of three candles).
Japanese candlestick patterns are divided, in terms of their effects on price movement, into two main sections:
1- Continuation candlestick patterns: They indicate the possibility of the price continuing to move in the prevailing trend.
2- Japanese candlestick reversal patterns: They indicate the possibility of a reversal of the price trend from bullish to bearish or vice versa.
Japanese Candlestick Secrets
Pay close attention to Japanese candlestick reversal patterns.
There are two main requirements for trading on Japanese candlestick patterns: interpreting the candle, and identifying the trend.
Spotting candlestick reversal patterns on larger time frames.
Doji candle secrets.
The effect of the pin bar candle on the market.
Pay close attention to the color of the hammer and shooting star candles.
Some Japanese candlesticks need confirmation before trading with them.
Look for evidence that confirms the strength of candlestick trading signals.
Combine candlestick patterns signals with technical indicators signals
Use trend lines and support and resistance levels with Japanese candlesticks
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