Green vs Red Candles Explained
55sClear visual explanation of candlestick anatomy, essential for any beginner trader.
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This video provides a beginner-friendly guide to Japanese candlesticks, explaining their structure (body, wicks, tail) and key reversal patterns like engulfing, doji, hammer, morning/evening star, and three white soldiers/crows. The presenter emphasizes that candlesticks are predictive tools, not guarantees, and should be used alongside other analysis methods like support/resistance and chart patterns.
Green candles have a body from open (bottom) to close (top); red candles open at top, close at bottom. Both have upper and lower wicks (tails).
A larger green candle fully covers the previous red candle's body, indicating a potential price reversal upward after a downtrend.
A Doji has a very small body (open and close near same price), showing indecision between buyers and sellers. It often signals a reversal, especially at trend extremes.
Hammer has a small body at the top and a long lower wick, appearing after a downtrend to signal reversal upward. Hanging Man looks similar but at the top of an uptrend, warning of a drop.
A three-candle pattern: a long candle, a small-bodied star (could be doji), and a long opposite candle. Morning Star appears after a downtrend (bullish), Evening Star after an uptrend (bearish).
Three consecutive long green candles (soldiers) signal strong bullish continuation; three long red candles (crows) indicate strong bearish continuation.
Candlesticks are not 100% accurate. They should be combined with support/resistance, chart patterns, and a personal strategy for better decision-making.
Japanese candlesticks are powerful tools for reading market sentiment and predicting reversals, but they must be used as part of a broader trading strategy for consistent results.
What are the two main components of a Japanese candlestick?
Body and wicks (shadows/tails).
00:58
What does a green candle indicate?
Price closed higher than open (bullish).
01:10
What does a bullish engulfing pattern consist of?
A larger green candle that completely engulfs the body of the previous red candle.
02:35
What does a Doji candle represent?
Market indecision; open and close are nearly equal.
04:01
Where does a Hammer candle typically appear?
At the bottom of a downtrend, signaling a potential bullish reversal.
06:36
What is the difference between a Hammer and a Hanging Man?
Both have same shape; Hammer appears in downtrend, Hanging Man in uptrend.
08:00
Name the three-candle pattern that signals a bullish reversal after a downtrend.
Morning Star.
08:00
What do Three White Soldiers indicate?
Strong bullish continuation; three consecutive long green candles.
08:33
Can candlesticks guarantee price reversals?
No, they are predictive and should be used with other technical analysis tools.
11:26
Engulfing Pattern as Reversal Signal
One of the most reliable candlestick patterns for identifying trend reversals; widely used by traders.
02:35Doji Indicates Indecision
Doji candles are key for spotting potential market turning points when combined with trend context.
04:01Candlesticks Are Not Enough
Essential reminder that no single tool can predict markets; risk management and multi-strategy approach are crucial.
11:26[00:02] Japanese candlesticks and how you can benefit from them in your trading. I'll show you how you can literally start understanding the meaning of trading through Japanese candlesticks alone. Today's video is educational, so if alone. Today's video is educational, so if you're interested in sitting down and learning
[00:16] properly, I hope you'll grab a cup of coffee, sit down, and focus intently on the information I'm about to share. I'll be sharing a lot of information that will, God willing, benefit you from the beginning of your trading journey. Without further ado, let's get straight to the explanation and tell you all the
[00:30] details about Japanese candlesticks. Japanese candlesticks are literally Japanese; they were invented by a Japanese man named Homa Munesa. He created them
[00:42] so he could trade rice at that time. However, today we're not literally going to trade rice; we're going to trade other things, whether it's stocks, cryptocurrencies, or, in other words, Forex. Japanese candlesticks are useful for this, as you can see. I've created this image right now to illustrate this.
[00:58] I will explain to you exactly what a candle is so that we can begin explaining everything related to Japanese candlestick analysis. As you can see, Japanese candlesticks are green and
[01:10] red candles. These are the two candles you will see throughout your trading life. The green candle has a body, as you can see; this is the body of the green candle. The red
[01:23] candle also has a body. The green candle's opening and closing are the opposite of the red candle's. When we look at the chart, you will find that the green candle opens from the bottom and closes from the top, as you can see, exactly the opposite of the red candle. Since the green candle opens from the bottom and
[01:39] closes from the top, then when a red candle appears, for example, you will find that it example, you will find that it literally opens from here and then literally opens from here and then closes from below, exactly the opposite of the green candle. At the same time,
[01:53] as you can see, we have wicks. There is literally a lower wick and an upper wick, but I did not include an upper wick here; I only included the upper wick. For the red candle, but there's a tail for both candles, whether red or green. As you can see, the
[02:10] candle has a body, as we said. The green candle opens here and closes here, and the opposite is true for the red candle. The red candle opens here and closes below. At the same
[02:22] red candle opens here and closes below. At the same time, there's also an upper tail and a lower tail for both candles.
[02:35] As you can see, we have two candles, which is the bullish engulfing candle. If you see a bullish engulfing candle, which consists of a green or red candle that is larger than the other candle, meaning the price was falling and we saw, as you can see now, a red candle here, and then we have a green candle that is larger than it.
[02:49] larger than it. This indicates a bullish engulfing or a Gulfwink. This indicates a price reversal. If the price was falling, then it might rise very significantly. Of course, this is based on
[03:05] The two directions, if you see it at the top, indicate a reversal, and if you see it at the bottom, it also indicates a reversal. This means you can use it to either sell or
[03:17] buy. This means that if you see it at the bottom, you will see the price reverse or rise upwards, and if you see it at the top, the price will reverse and fall downwards. As you can see, we have a quick, recent example that
[03:33] happened less than two hours ago. This candle, as you can see, is an Ingolfin candle. As we explained, the market was falling here, and then a green candle opened here and closed here, and it was larger than the previous candle. So we have an
[03:49] Ingolfin, as you can see here, and the price rose upwards. As you can see, going back to the Polish Ingolfin and the Brush Ingolfin, the buying engulfing, whether downwards or upwards, is the opposite of each other, as
[04:01] we said. This is a simple example, and these are simple candles. I wanted to share this with you for those who want to see everything related to the bullish trend. As for the Doji candle, as you can see, the Doji candle
[04:13] Doji candle, as you can see, the Doji candle is literally a plus sign. This is literally a plus sign. This candle indicates price pressure between buyers and sellers. For example, as you can see here, the price was falling down, and there was pressure between
[04:27] buying and selling. This pressure compressed the candle's price or body until it formed a plus sign, resulting in a price reversal and the price rising. As you can see, the same principle applies
[04:39] if the price is going up or down. If you see it at the top, it means the price might reverse downwards, and if you see it at the bottom, it also means the price might reverse upwards. So let's take a real-time example
[04:54] and see what the Doji candle is and how it directly affects the chart. As you can see, we have a real-time example right now, where the candles were rising or The price was rising, and then we had this candle, which is a Doji candle. Let me zoom in on
[05:07] the chart so you can see it more clearly. This candle is a Doji candle. The price was literally squeezed between the buying and selling pressure until the candle body became very, very small. Then the
[05:19] very, very small. Then the price reversal was confirmed by these two candles, as the pressure between the buying and selling pressure became very strong. The price remained the same for several times, or for several hours, and the price went up and down, up and down, up and down, until the candle closed in this place. The last candle closed
[05:34] candle closed in this place. The last candle closed here, and the price reversed, as you can see. Now, some people might say, "But I saw these candles, aren't they Dojis?" Okay, these are Dojis, but the candle body in them was slightly larger than a Doji. As you can
[05:49] see, the body of a Doji is very, very thin, unlike these candles. Firstly, secondly, you should n't rely solely on Japanese candlesticks for trading. In other words, if you want to enter a buy or sell trade, you won't rely
[06:06] solely on Japanese candlesticks. Japanese candlesticks are only meant to help you understand where the price is headed and what's happening in the market. You need to know what's happening before you enter; you need to know if there's buying or selling. You need to know what people are doing
[06:23] because the market has literally become like a war between two sides: buyers and sellers. So, you need to
[06:35] understand what's happening in the market in front of you to know where to enter and where to go. Candlesticks where to enter and where to go. Candlesticks aren't 100% certain that the price will reverse. You need to understand this, whether it's Japanese candlesticks or anything else
[06:49] related to technical analysis. Technical analysis is about predictions, not studies based on the assumption that something will happen 100 or 1 million times. This is something you need to understand, something you need to understand, know, and be certain of. Okay, now we've reached the Hammer candlestick pattern. The Hammer candlestick, my friends, has a
[07:04] know, and be certain of. Okay, now we've reached the Hammer candlestick pattern. The Hammer candlestick, my friends, has a literally like a hammer. If you know what a hammer looks like, of course, everyone knows what a
[07:18] hammer looks like. The hammer literally has a small point at the top, a body, small point at the top, a body, and a long tail, just like the Hammer candlestick. We have the Brush candlestick, which is a downward trend, and we have the Polish candlestick, which is an upward trend. So, the Hammer candlestick
[07:33] Polish candlestick, which is an upward trend. So, the Hammer candlestick also indicates a price reversal. As you can see, if the price was falling, then we have a Hammer candlestick, which strongly indicates that the price has been price was falling, then we have a Hammer candlestick, which strongly indicates that the price has been
[07:47] respected and has risen. The same thing happens when the price is respected and we have a and quickly. I don't want to go on too long with the Hammer candlestick because I've already talked to you about
[08:00] candlestick patterns in a lot. So, what's next? You'll see, it'll be easier than the previous one. As you can see, we have something called the Morning Star or Evening Star. The Star candle is literally very similar to the Doji, or let's say it's like the
[08:16] Doji, but the difference is that its body doesn't have to be in the center. It could be here, here, here, or here. It's be in the center. It could be here, here, here, or here. It's price reversal. If the price is falling, we have a Star candle, and if the price is rising, we have a
[08:33] Star candle. The price reverses and goes down, and here the price reverses and goes up. As you can and here the price reverses and goes up. As you can see, we have the Three White Soldiers, or the Three Candles, or the Three Crows. Everyone calls them something different. These candles, as you can see, are
[08:49] very simple in concept, but their meaning is very complex. You see, you have a candle here, and a candle there, and a candle here. They were all green, and they formed a bullish pattern. This method is exactly as I mean, and we'll now
[09:01] take a real-life example so you understand exactly what I mean. These candles also indicate price completion, not necessarily the continuation of the price's trend. So, if you see a green candle, then another green candle, then another green candle, in the same way and with the same pattern, this means
[09:18] that the price might go up. The same applies to red candles, but here it might go down. The three green candles and the three red candles confirm that the
[09:32] price might continue to rise or it might continue to fall, as you can see. Now, we have a simple example of the three candles, or the three soldiers. The three green candles, as you can see, we have one green candle, then another green candle, and then another green candle, and then
[09:47] then another green candle, and then we have a larger rise in the price. The same applies if it's a fall: a red candle, then another red candle, then another red candle, and then a larger fall in the price. So, this was a simple and real-life example of candles. The three, or the three soldiers, or the three crows, as I
[10:02] or the three soldiers, or the three crows, as I mentioned, the names aren't very important. Here's another example, as you can see, we have a candle, a candle, a candle, you can see, we have a candle, a candle, a candle, meaning a price increase from here to there. Now we have another
[10:15] meaning a price increase from here to there. Now we have another dog, but we see that its shape very closely resembles a hammer, or a very strong
[10:27] hammer. In English, it's called the Dragonfly Dog, which is like a English, it's called the Dragonfly Dog, which is like a dragon, a dragon dog. Let's say the name doesn't make much difference, but its shape is very similar to a hammer, so you can
[10:43] use it for both price increases and price decreases. Now we have another candle that also very closely resembles a hammer, price decreases. Now we have another candle that also very closely resembles a hammer, which is the L candle, which is the L candle, meaning the hangman's noose, or let's say the
[10:57] meaning the hangman's noose, or let's say the Hangman candle, meaning the hanging man. Let's Hangman candle, meaning the hanging man. Let's say it has more than one name. This candle is also very similar to the hammer. As you can see, there was a price drop. The
[11:10] price went down again, and after the price dropped, we got a body for the candle. After the candle had a body, meaning it closed, a new candle opened, and the price rose. The same thing happened with the drop. So, its presence indicates a price reversal, whether
[11:26] upward or downward. I just want to point out and talk about more than one story related to trading, whether with Japanese candlesticks or any other trading story. My friends, trading must rely on more than one story, must rely on more than one story, strategy, candlesticks, and chart patterns. More than one
[11:40] topic, but try to simplify the topic as much as possible and don't rely on one source or just one thing to trade on. Japanese candlesticks are not enough for you to enter, whether to buy or sell, in currencies, stocks, or Forex. You have to be a professional.
[11:57] currencies, stocks, or Forex. You have to be a professional. So, you can look at, let's say, learn about resistance and support levels. Learn a strategy that is specific to you, one that will literally benefit you if you want to buy and sell. You also have to learn
[12:14] about chart patterns, and so on. I want to talk about it, as I mentioned in the next video. As you can see, we have a chart pattern here, which is very easy. I'll explain it, God willing, in the chart pattern here, which is very easy. I'll explain it, God willing, in the next video. We have a
[12:28] direct price drop here, so there are several things that will benefit you if you want to trade candlesticks. They will help you understand how the market is moving and make decisions more effectively and accurately. That's all for
[12:46] of video, don't forget to like it and subscribe to the channel to receive all the new content. This was Shams from the Shams Crypto channel.
[13:14] [Music]
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