troduction to Candlesticks: Steps to Understanding Candlestick Charts

Candlestick charts are one of the most popular tools in Forex trading, providing a visual representation of price movements over a specific period.

Step 1: Understanding Candlestick Structure

Each candlestick consists of four key 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 time frame.
✅ Low – The lowest price reached during the time frame.

🔵 Bullish Candle (Green/White) – When the closing price is higher than the opening price.
🔴 Bearish Candle (Red/Black) – When the closing price is lower than the opening price.

Step 2: Learning Candlestick Components

A candlestick has two parts:
1️⃣ Body – Represents the difference between open and close prices.
2️⃣ Wicks (Shadows) – Show the highest and lowest price levels.

Step 3: Identifying Common Candlestick Patterns

✅ Single Candlestick Patterns:

• Doji – Indicates market indecision.
• Hammer – Signals a potential bullish reversal.
• Shooting Star – Suggests a bearish reversal.

✅ Multiple Candlestick Patterns:

• Engulfing Pattern – A strong reversal signal (Bullish or Bearish).
• Morning Star – A bullish reversal formation.
• Evening Star – A bearish reversal formation.

Step 4: Using Candlestick Charts for Trading Decisions

✅ Look for candlestick patterns near support and resistance levels.
✅ Combine with technical indicators (e.g., Moving Averages, RSI).
✅ Use higher timeframes for stronger signals.

Step 5: Practice Analyzing Candlestick Charts

📌 Open a demo account and observe real-time candlestick movements.
📌 Identify bullish and bearish patterns in historical charts.
📌 Test trading strategies using different candlestick formations.