Real Knowledge of Candle Patterns Candlestick patterns are one of the most important tools in technical analysis. They help traders understand price movements, market psychology, and potential trend reversals or continuations. Each candlestick represents a battle between buyers (bulls) and sellers (bears). When you observe many candles together, you see patterns that reveal shifts in momentum. These patterns have been used for centuries—originating in Japan—and remain powerful even in modern algorithmic markets.
To understand candlestick patterns, you must first understand the candle structure. A candlestick has four major price points:
Open – the price at which the candle starts
Close – the price at which the candle ends
High – the highest price reached during the candle
Low – the lowest price reached during the candle
If the close is higher than the open, the candle is bullish (typically green or white). If the close is lower than the open, the candle is bearish (typically red or black). The body shows the open-close range, and the wicks (shadows) show the high-low range.
