How to Read a Candlestick Chart (A Beginner's Guide)

A candlestick chart is the most common way professional traders look at price. Each candlestick represents one time period — one minute, one hour, one day, whatever timeframe you selected. And each candle tells you four things: the open (price at the start of the period), the high (highest price reached), the low (lowest price reached), and the close (price at the end of the period). Visually, the candle has a rectangular body and two thin lines sticking out the top and bottom called wicks (or shadows). The body shows the open and close. If the candle is green (or white), the close is HIGHER than the open — buyers won the period. If it's red (or black), the close is LOWER — sellers won. The wicks show how far each side pushed before losing control. Here's the key insight that separates beginners from traders: the BODY shows who won, but the WICKS show who tried. A green candle with a long lower wick means sellers pushed hard, then buyers pushed back harder. That's a strong bullish signal, especially at support. A red candle with a long upper wick at resistance means buyers tried to break through but got slammed back — a strong bearish signal. The five candlestick patterns that actually matter: the doji (indecision — open and close nearly equal), the hammer (long lower wick, small body at top — bullish reversal at support), the shooting star (long upper wick, small body at bottom — bearish reversal at resistance), the bullish/bearish engulfing (the second candle's body completely covers the first's — strong momentum shift), and the pin bar (long wick in one direction, small body at opposite end — rejection of a price level). Everything else is noise. Don't trade patterns in isolation. A hammer in the middle of a choppy range means nothing. A hammer at a major daily support after a 5-day selloff is a high-probability setup. Context is everything — the level matters more than the pattern.