Candlestick charts are one of the most popular tools in crypto and stock trading. They help traders visualize price movements in a clear, simple format. Here's how to understand them as a beginner:
What is a Candlestick?
Each candlestick represents price movement within a specific time frame (e.g., 1 minute, 15 minutes, 1 hour, 1 day).
A candle shows:
Open Price: The price when the time period starts
Close Price: The price when the time period ends
High Price: The highest price reached during the period
Low Price: The lowest price during the period
The Body and Wicks
Body: The thick part of the candle — shows the range between the opening and closing prices.
Wicks (or Shadows): Thin lines above and below the body — show the highest and lowest prices.
Green Candle: Price closed higher than it opened (bullish)
Red Candle: Price closed lower than it opened (bearish)
Basic Candlestick Patterns
Doji: Open and close prices are almost the same — signals indecision.
Hammer: Small body, long lower wick — often seen after a downtrend, indicating a possible reversal.
Engulfing: A large candle that fully covers the previous one — indicates a trend reversal.
Why Traders Use Them
Candlesticks help traders:
Identify trends (uptrend, downtrend, sideways)
Spot potential reversals
Recognize market sentiment
Final Tips
Always look at candlestick patterns in combination with volume and trendlines.
Use higher time frames (1 hour, 4 hours, daily) for more reliable signals.
Understanding candlestick charts is your first step toward mastering technical analysis in trading!
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