Four prices, one glyph, and the story in between.
beginner · 4 min read · 10 XP
By the end of this lesson you will be able to look at any single candle and describe what happened during that period — where price opened, how far it stretched in each direction, and who was in control when the bell rang.
Every candlestick summarises one period of trading — one minute, one hour, one day, depending on your chart's timeframe — using exactly four prices:
The candle draws those four as a body and two wicks:
The one thing to internalise
The body shows where the period settled. The wicks show where it went and was rejected. Those are two different pieces of information, and most of candlestick reading is holding them apart.
A candle is not just data — it is a record of an argument between buyers and sellers, and the shape tells you how the argument went.
A long body with short wicks means one side controlled the whole period. Price opened, moved decisively in one direction, and closed near its extreme. There was little disagreement.
A short body with long wicks means the opposite: price travelled a long way in both directions and ended up roughly where it started. Both sides pushed, neither won. This is indecision, and it matters most when it appears after a long run.
A long wick on one side only is the most informative shape of all. A candle with a long lower wick and a body near the top means sellers pushed price down hard and were completely overwhelmed before the close. Somebody with size stepped in down there. That level is worth remembering.
Sellers took price 50 pips lower and lost all of it. The candle has a small green body and a long lower wick. That 1.0800 area attracted enough buying to reverse a substantial move — which makes it a level worth watching if price returns to it.
You will find lists of a hundred named candlestick patterns. Most are noise. A small number recur often enough, and mean something specific enough, to be worth knowing:
| Shape | What it looks like | What it suggests |
|---|---|---|
| doji | Almost no body, wicks both sides | Balance — neither side won the period |
| Hammer | Small body at the top, long lower wick | Sellers pushed down and were rejected |
| Shooting star | Small body at the bottom, long upper wick | Buyers pushed up and were rejected |
| Marubozu | Long body, almost no wicks | One-sided control from open to close |
| engulfing | Body fully covers the previous body | A decisive shift in control |
Context is not optional
A hammer in the middle of a range is noise. The same hammer at a level price has respected three times before, at the end of a sustained decline, in the London session, is a signal. The shape is the smaller half of the information; where it appears is the larger half. Any course that teaches you patterns without teaching you location is teaching you to lose money slowly.
What is this candle telling you?
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One more thing that trips people up: a candle's shape depends entirely on the timeframe you are looking at.
A single daily candle with a long lower wick is, on the hourly chart, a sequence of a dozen candles showing a decline and a recovery. Neither view is more true. The daily candle compresses that story into one glyph; the hourly shows you the sequence.
This is why traders check more than one timeframe: the compression that makes a daily candle readable is also the compression that hides how the move happened.
What to remember
A candlestick compresses a period of trading into four prices. The body tells you where it settled, the wicks tell you what was rejected, and the shape only becomes a signal once you know where on the chart it formed.