Stock Market · Technical Analysis

Candlestick basics, the trader's alphabet

Reading a single candle

Every candle represents one time period (1 min, 1 day, 1 week. Your choice). It shows four prices:

• Open. Price at the start of the period
• High, highest price reached
• Low, lowest price reached
• Close. Price at the end of the period

The body and wicks

The thick rectangle (body) shows the range between open and close. The thin lines above and below (wicks/shadows) show the high and low.

> A green (bullish) candle closes HIGHER than it opened. A red (bearish) candle closes LOWER.

What a candle tells you

The body size shows conviction. A large body means buyers (or sellers) were in full control. A small body means the session ended with neither side winning, indecision.

Wicks reveal rejection. A long upper wick means price tried to go higher but was pushed back down. Sellers showed up. A long lower wick means buyers stepped in and rejected lower prices.

Why candlesticks beat bar charts

Japanese rice traders invented candlesticks 300 years before Wall Street used bar charts. They pack more visual information into the same data. You can read a chart much faster with candles.

300years old. Candlestick charts predate most Western techniques

Timeframes matter

The same stock will look very different on a 5-minute chart versus a daily chart. Day traders watch short candles. Swing traders use daily or weekly candles. Always match your timeframe to your holding period.

Takeaway. Each candlestick shows open, high, low, close. Body size shows conviction, wicks show rejection.