How to Read the Japanese Candles

Part 1 – Single candle

What do we know when we look at candles?

To know what a candle says we need to find the following factors
I. Candle sizeThe size of the candle (from the low to the high of the candlestick) shows the amplitude of price movements over a period of time. Looking at this range you can easily tell the level of volatility at that time, whether the market is in a state of “hibernation” or in a vibrant state.

II.Candle bodyThe body of a candle represents the price of the market and the power of the market.
A full bar candle shows that market pressure is tilting toward the buying / selling side.
While a thin body shows a balance of force on both sides.

Based on the body of the candle we can see :
Is the market going up or down?
And is that movement strong?
III.Candle shadowThe shadow of the candle is the part where the price moves but cannot sustain.
The candlestick shows strong buying / selling pressure when it is relatively large in size and completely on one side.

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