Japanese candlesticks give us a better understanding of value, or more precisely, the interpretation of value given to any instrument by investors and traders than any other type of chart. They also help us have a better understanding of the psychology of traders and investors driven by fear, greed and hope, since all these characteristics are represented in price movements.
Before going through candlesticks patterns and how to trade based on them, we should first understand what different candlesticks represent by themselves.
Long candlesticks
Long candlesticks describe strong buying/selling pressure. Price had a sharp advance/decline from the open price (traders were aggressive). When we talk about “long” candlesticks, we are referring to the body of the candlestick.
But, long compared to what? We know it is long when we compare the action of any candlestick with the length of previous candlesticks. A “long” candlestick must be clearly identified in order to be a valid pattern, should there be any doubt, it is probable that the ca