To succeed in Forex trading, start by understanding candlesticks.

If you are looking for tools to help make trading decisions in Forex, you must think of Candlesticks (K-line), which are essential weapons for professional traders. Candlesticks not only display prices but also reveal the market’s sentiment through the clash between buyers and sellers.

The advantages that make many traders turn to candlesticks are because:

• They tell the story of buying and selling pressure clearly
• The patterns are easy to recognize, allowing for quick trend detection
• They have been proven for over 200 years since the days of Japanese rice traders

What are candlesticks and how many parts do they have?

Candlesticks are small units of a chart composed of four key data points: opening price, closing price, highest price, and lowest price during your selected time frame.

The structure of a candlestick is quite simple:

• Body (Body): The thick central part showing the distance between open and close prices
• Wick/Shadow (Wick/Shadow): The thin lines extending from the body indicating the highest and lowest prices

What does the color of a candlestick indicate?

White or Bullish Candlestick (Bullish): Closing price is higher than opening price = buyers win this round

Black or Bearish Candlestick (Bearish): Closing price is lower than opening price = sellers win this round

The longer the candlestick, the more intense the buying or selling pressure.

Basic candlestick patterns to remember

1. Doji - Sign of uncertainty

A candlestick with nearly equal open and close prices, resulting in a very short body, but the wick can be long. This indicates that buyers and sellers are both strong, with no clear winner.

Signal: If a Doji appears after a long uptrend, it may warn that the upward momentum is weakening.

2. Marubozu - Clarity of dominance

A candlestick with no wick or very short wicks, with a large, full-colored body.

• Full White: Buyers control from open to close, with no retracement
• Full Black: Sellers control from start to finish

This signal is very strong because it shows one side is in complete command.

( 3. Spinning Top - Hesitation

A candlestick with a short body but long wicks, indicating that during this period, prices moved up and down significantly but ended near the starting point. Buyers and sellers are still undecided about who will dominate.

Note: The Spinning Top appearing in an uptrend may be a warning that selling pressure is increasing.

Single candlestick patterns - Reading signals from shape

) Hammer & Hanging Man - The twin characters

Hammer ###Hammer###: Appears in a downtrend, small body, long lower wick, almost no upper wick

• Meaning: Sellers tried to push the price down, but buyers pushed back up
• Signal: Possible reversal from down to up

Hanging Man (Hanging Man): Appears in an uptrend, small body, long lower wick

• Meaning: Buyers tried to push higher, but sellers pressed down
• Signal: Warning that the uptrend may break

( Inverted Hammer & Shooting Star - Up and down signals

Inverted Hammer )Inverted Hammer###: Small body, long upper wick, almost no lower wick, appears in a downtrend

• Meaning: Buyers are testing the market but haven’t gained full control
• Signal: May indicate the market is preparing to reverse upward

Shooting Star (Shooting Star): Long upper wick, small body, almost no lower wick, appears in an uptrend

• Meaning: Strong selling pressure despite market resistance
• Signal: Could mark the peak of the uptrend

2-3 candlestick patterns - Reading market intent

( Bullish Engulfing vs Bearish Engulfing

Bullish Engulfing )Black followed by White###: First candle is black, second is white and larger, closing above the previous black candle’s open

• Meaning: Weak sellers, strong buyers entering
• Signal: Possible trend reversal upward

Bearish Engulfing (White + Large Black): First candle white, second black and larger, closing below the previous white’s open

• Meaning: Weak buyers, strong sellers taking over
• Signal: Possible trend reversal downward

( Tweezer Tops & Bottoms - Peaks and valleys

Tweezer Tops: Two consecutive candles with equal long upper wicks at the high point

• Meaning: The market has tested the same level twice, indecisive
• Signal: Uptrend may be ending

Tweezer Bottoms: Two consecutive candles with equal long lower wicks at the low point

• Meaning: The market tested the same support level twice without breaking it
• Signal: Potential buy opportunity

Three-candlestick patterns - Reading the market story

) Morning Star & Evening Star - Morning and Evening Stars

Morning Star ###Morning Star###: Sequence: Black + Doji + White

• First candle: continues downward
• Second candle: indecision, weak upward movement
• Third candle: upward, confirming reversal
• Signal: Downtrend ends, new uptrend begins

Evening Star (Evening Star): Sequence: White + Doji + Black

• First candle: continues upward
• Second candle: uncertainty, weak upward move
• Third candle: downward, confirming reversal
• Signal: Uptrend ends, new downtrend begins

( Three White Soldiers & Three Black Crows

Three White Soldiers )White Soldiers(: Three consecutive white candles, each opening within the previous candle’s body and closing at new highs

• Meaning: Buyers are steadily increasing, no pullback
• Signal: Strong uptrend, still room to go

Three Black Crows )Black Crows###: Three consecutive black candles, each opening below the previous close and closing lower

• Meaning: Sellers are continuing, no buying comeback
• Signal: Strong downtrend, danger approaching

( Three Inside Up & Down - Confirmations

Three Inside Up: Black + Small White Inside + Larger White than the black

• Meaning: Buyers confirm on the third candle
• Signal: Full upward move

Three Inside Down: White + Small Black Inside + Larger Black below the white

• Meaning: Sellers confirm on the third candle
• Signal: Full downward move

Important notes when reading Forex candlesticks

✓ No 100% guarantee: Even with the same pattern, outcomes vary depending on market conditions. If a K-line signal has less than 50% success rate, check the overall market context and fundamental data.

✓ Confirmation wait: After seeing a signal, do not rush in. Wait for the next candlestick to confirm.

✓ Use multiple tools: Candlestick patterns are effective, but combining them with trend lines, support-resistance levels, and other indicators enhances accuracy.

✓ Practice continuously: Learning K-line patterns takes time. The more you observe, the faster your brain recognizes these patterns.

Forex is a market offering both profit and loss opportunities. Understanding candlesticks helps you monitor market conditions, enabling smarter decision-making. Trading based on principles and without emotional bias is the technique that successful traders employ.