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Japanese Candles: Your Quick Guide to Trading with Confidence

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Want to understand the language of the market? Candlestick patterns are your key. Each candle tells the story of traders and the pressure on price.

Reliable Upward Patterns:

  • Hammer: After a decline, strong buying pressure = an upcoming bullish reversal
  • Morning Star: 3 candlestick pattern = Market reversal signal upwards
  • Bullish Engulfing: A large candle engulfs the previous one = Beginning of a new upward trend

Bearish patterns you should not ignore:

  • Dark Cloud Cover: A downward penetration of the halfway point = strong selling coming
  • Evening Star: 3 candles = signal to stop rising
  • Bearish Engulfing: Large bearish candle = Entry of bearish strength

Summary: Don't bet on a single pattern. Combine patterns with other indicators like moving averages, relative strength index. Test first in a demo account before your real money. Technical analysis is probabilistic, so always manage your risks.

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