What a Candle Shows You
Each candle summarizes one time period — a minute, day, week, whatever timeframe you're viewing. It tells you four things at once:
- Open — the price at the start of the period
- High — the peak price reached
- Low — the lowest price reached
- Close — the price at the end of the period
│ ← upper wick (high)
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║ ║ ← body (open to close)
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│ ← lower wick (low)
A green/hollow candle = price closed higher than it opened (buyers won the period). A red/filled candle = price closed lower than it opened (sellers won the period).
Why Candlesticks Beat Line Charts
A line chart shows only the closing price. Candlesticks show the entire battle that happened during the period:
- Long body = decisive move; one side dominated
- Small body = indecision; neither side won
- Long wick = price was rejected from that level
- No wick = price closed at the extreme — strong momentum
You see emotion, not just outcomes.
Five Candles Worth Knowing
Doji
Body so small it's almost a line. Open ≈ close. Indecision. Often appears at trend reversals.
Hammer
Small body at the top, long lower wick. Sellers pushed price down, buyers slammed it back up. Bullish reversal signal at the bottom of a downtrend.
Shooting Star
Small body at the bottom, long upper wick. Buyers tried to rally, sellers crushed it. Bearish reversal at the top of an uptrend.
Engulfing Pattern
A candle whose body completely covers the previous candle's body. Bullish engulfing at a bottom or bearish engulfing at a top can mark a turn.
Marubozu
A candle with a big body and tiny or no wicks. Pure conviction — strongest possible move in that direction.
Context Beats Patterns
A hammer at random isn't a signal. A hammer at a known support level after a long downtrend is meaningful. Always read candles in context — never in isolation.
Timeframes Matter
The same chart looks bullish on the daily and bearish on the weekly. Pick the timeframe that matches your strategy:
- Day traders: 1-min, 5-min, 15-min
- Swing traders: 1-hour, 4-hour, daily
- Long-term investors: weekly, monthly
Candlesticks don't predict the future. They tell you what just happened — and what was being decided when no one was watching the headline.