Candlestick charts are the standard way traders read price — and once they click, you'll never go back to a plain line chart. Here's how to read a candle and the few patterns actually worth knowing.
How to read a single candle
Each candle shows four prices over a period (a minute, an hour, a day):
- Open — where price started.
- Close — where it ended.
- High and low — the extremes, shown by the thin "wicks".
The thick part is the body (open to close); the thin lines are wicks (the rejected extremes). A close above the open is usually shown bullish; below, bearish.
What wicks and bodies tell you
- Long body — strong, decisive move.
- Long wick — price was pushed there but rejected — a hint of pressure the other way.
- Small body — indecision.
A handful worth knowing
- Doji — open and close nearly equal; indecision.
- Hammer — small body, long lower wick; possible rejection of lower prices.
- Engulfing — one candle's body fully covers the previous one; a possible momentum shift.
Use them with structure
Candlestick patterns are most useful at meaningful levels — at support, at resistance, or where a trend is stretched. On their own, in the middle of nowhere, they're noise.
Don't memorise dozens
You don't need an encyclopedia of patterns. Understand bodies, wicks and a few key shapes, then combine them with support and resistance and a defined stop.
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Educational content only — not financial advice.