Japanese Velas: From Theory to Real Gains in Crypto

Traders have been using Japanese candlesticks since the 18th century, but in crypto they reach another level because the market never sleeps. What does that mean? That traditional patterns work differently here.

The Basics (You Can’t Skip)

Each candle shows four prices: open, high, low, and close. The body is the distance between open and close, and the wicks are the extremes. Green = closed higher (bullish). Red = closed lower (bearish). That’s simple.

Patterns That Work in Crypto

Bullish:

• Hammer: Small body + long lower wick = reversal after drops
• Three White Soldiers: 3 consecutive green candles = strong buying momentum
• Bullish Harami: Long red candle + small green candle inside = selling pressure exhausted

Bearish:

• Hanging Man: Similar to the hammer but after rises = imminent rejection
• Shooting Star: Small body + long upper wick = sellers arrived
• Three Black Crows: 3 red candles = total seller control

Here’s the Important Part

It doesn’t rely ONLY on candles. The best traders combine:

• Indicators (RSI, MACD)
• Support/resistance levels
• Trading volume
• Multiple timeframes (1H + 4H + 1D)

A pretty candle without context is like reading horoscopes.

In Crypto, Some Patterns Change

Gaps (hollows) almost don’t exist because Bitcoin and altcoins trade 24/7 without closures. What you see in traditional futures is irrelevant here.

Your Checklist Before Trading

1. Understand each pattern (don’t trade without knowing what you’re seeing)
2. Combine with other technical indicators
3. Analyze across multiple timeframes
4. Stop-loss first, entry after (risk management is life)
5. Define your risk:reward ratio before clicking

Executive Summary

Japanese candles are powerful but not magical. They are a piece of the puzzle. If you only look at patterns, you’ll probably lose. If you use them as part of a solid plan with other indicators and discipline, then you have a real advantage in the market.

The difference between a profitable trader and one who goes bankrupt is not the tool, but patience and money management.