Patterns are categorized by their signal: whether the current trend is likely to continue or reverse.

: Indicates the lowest price reached during the period.

This guide covers the fundamental components of Japanese candlesticks and essential patterns to help you interpret market sentiment. For a deeper dive, you can refer to the foundational work in . 1. Anatomy of a Candlestick

: Indicates the highest price reached during the period.

: The open and close prices are nearly identical, resulting in a cross-like shape that signifies extreme market indecision. Multi-Candle Reversal Patterns What are Candlestick Patterns? Insights and Tips - N26

: The price closed lower than it opened. Shadows (Wicks) : The thin lines extending from the body.

: Long bodies indicate strong buying or selling pressure, while short bodies suggest low activity or indecision. 2. Essential Candlestick Patterns

: A small body at the top with a long lower wick; signals a potential bullish reversal after a downtrend.