Reading Candlestick Charts
Candlestick charts are the most popular charting method among traders. Each candle tells a story about price action.
Anatomy of a Candlestick
Each candle shows:
- Open: Starting price
- Close: Ending price
- High: Highest price reached
- Low: Lowest price reached
Body
The filled/colored portion between open and close
Wicks (Shadows)
Thin lines above/below the body showing high/low
Bullish vs Bearish Candles
Bullish (Green/White):- Close is higher than open
- Indicates buying pressure
- Close is lower than open
- Indicates selling pressure
Key Candlestick Patterns
Single Candle Patterns
Doji: Open equals close, shows indecision Hammer: Small body, long lower wick - potential reversal up Shooting Star: Small body, long upper wick - potential reversal down Marubozu: Full body, no wicks - strong momentumMulti-Candle Patterns
Engulfing: Second candle completely covers first Three White Soldiers: Three bullish candles in a row Three Black Crows: Three bearish candles in a rowHow to Use
- Look for patterns at key support/resistance
- Confirm with other indicators
- Higher timeframes = more reliable signals
- Always wait for candle close before acting
Lesson Discussion