12 Basic Japanese Candlesticks

Japanese candlestick patterns are used to predict the direction of future price movement. Normally, there are 12 most popular Japanese candlestick patterns and investors can use them to identify trading opportunities and increase their own trading success rate.

Standard Candle – Standard Candle

Standard Candles include the following components:

Open price, close price, high price, low price.
The body of the candle is long.
The upper and lower candlesticks are short.
The green bullish candle closed higher than the opening price.
The red bearish candle closed lower than the opening price.

Marubozu Candle – Strength Candle

There is a very long body, so the opening and closing prices are far apart, and there is absolutely no shadow or there is but not much.

Meaning: shows very strong buying force (green candle) and selling force (red candle), so it often appears when the market goes up or down. This shows that in the process of buying and selling, investors have no hesitation between the two parties.

Spinning Top Candle – Spinning Top candle

Candles with a small body show a sign that both buyers and sellers are unable to gain control of the market. Investor sentiment is also hesitant to buy and sell. It is difficult to predict in the future the price will increase or decrease.

Hammer Candle – Hammer Candle

Is a special candle with identification points:

There is a beard at the bottom that is longer than the real body.
The candlestick must be almost 2 times longer than the real body.
Hammer candles can be bearish (Bearish – red) or bullish (Bullrish – blue).
The upper candlestick is very small or absent.

Meaning: The hammer candle is often appeared in the market with a downtrend, signaling an extremely strong reversal signal, showing the psychology of investors who are looking for a good price zone to enter the market and form pressure. The buying pressure overpowered the selling pressure, creating signs of reversal and price increase.

Inverted Hammer Candle – Inverted Hammer

Similar to the hammer candlestick pattern, it occurs together in a downtrend market and a reversal signal at the bottom. The inverted hammer candlestick pattern has a small body, the body can be green or red, the upper shadow is twice as long as the real body, and the lower shadow is very small or absent.

Meaning: predicts a reversal signal in the previous downtrend. However, investors need to observe more to confirm more signs before entering the trade.

Note: For Hammer – Inverted Hammer candles, it is necessary to observe other indicators because the opening and closing time is the time with the largest trading volume. When the seller acts to sell at the opening and closing price of the session, if the next trading session the price increases sharply, it will cause panic for the seller and make the seller in a losing position. The higher the price, the more sellers have the mentality to quickly close the trade to close the loss on the trade they have placed, thus increasing the buying pressure.

Hanging Man Candle – Hanging Man candle

The Hanging Man candle has the same shape as the Hammer candle but is completely different in nature. The Hanging Man candle appears in an uptrend market and warns of the possibility of a top in that trend.

Meaning: The Hanging Man candle predicts a bearish reversal in a previous uptrend. However, investors need to wait for the next trading session to end to make a decision before placing an order. A sign of a bear market is a strong bearish candle right behind the Hanging Man candle or a gap down.

Shooting Star Candle – Shooting Star Candle

The Shooting Star candle has the same shape as the Inverted Hammer candle but is completely different in nature. Shooting Star candlestick appears in an uptrend market and announces the possibility of creating a top of that trend.

Meaning: The Shooting Star candle usually appears in an uptrend, signaling an extremely strong reversal signal, which means that investors are looking for a good price zone to enter the market and build up selling pressure. bought before. Showing signs of a reversal and a drop in price appear.

Note: For the Hangging Man – Shooting Star candle, it is necessary to observe other indicators because the opening and closing time is the time with the largest trading volume. When the buyers act to buy at the opening and closing prices of the session, if the next trading session the price drops sharply, it will cause panic for the buyers and make the buyers in a losing position. The more the price drops, the more buyers have the mentality to quickly close the transaction to close the loss for the trade they have placed, thus increasing the selling pressure.

Doji Candles

As a candle with the opening price and closing price approximately the same, the body of the Doji candle is usually quite thin, almost like a straight line, forming a candle into a plus sign. Showing hesitation in determining the position of investors, no faction has determined the market.

Star Doji Candle – Star Candle

It is characterized that the upper and lower shadows are both short and of equal length.

Long Legged Doji Candle – Long Legged Doji candle

It is characterized that the upper and lower shadows are very long and roughly equal.

Dragonfly Doji Candle – Dragonfly Doji

There is a feature that there is no upper shadow but the lower shadow is very long.

Grave Stone Doji Candle – Gravestone Doji Candle

There is a feature that there is no lower shadow but only a very long upper shadow.

Winsdows candle (Graps)

Gap is simply understood as gaps, when the price moves too suddenly, increases too strongly or the price falls too sharply, causing the price to bounce (up – down) really higher than the closing price of the tree, so before, create a gap on the price chart.