A candlestick chart is a type of financial chart that shows an asset’s price movement over a set time period (like 1 minute, 1 hour, 1 day).

Each “candlestick” represents:

Open price (where it started)

Close price (where it ended)

High price (the top of the wick)

Low price (the bottom of the wick)

So in one glance, you can see how price behaved during that period.

🧩 Structure of a Candlestick

1. The Body (rectangle):

Shows the range between open and close.

If green/white → price went up (close > open).

If red/black → price went down (close < open).

2. The Wick (shadows above & below):

Shows the highest and lowest price reached.

Example:

│ High

│

█████ Open to Close (Body)

│ Low

📊 What Candlesticks Tell You

Green (bullish): Buyers were stronger → price closed higher than opened.

Red (bearish): Sellers were stronger → price closed lower than opened.

Wicks: Show rejections (e.g., a long upper wick = price went up but sellers pushed it back down).

🔍 Popular Candlestick Patterns

1. Doji – Open ≈ Close (indecision).

2. Hammer – Small body, long lower wick → possible bullish reversal.

3. Shooting Star – Small body, long upper wick → possible bearish reversal.

4. Engulfing Pattern – A big candle fully “engulfs” the previous one → trend shift signal.

✅ Why Traders Use It

Quickly shows who’s in control (buyers vs sellers).

Identifies trend reversals and continuations.

Works well with other tools (support/resistance, RSI, MACD).

⚠️ Limitations

Not 100% reliable on its own (needs confirmation with volume or other indicators).

Patterns can be misleading in low liquidity markets.

✅ In short:

Candlestick charts are a visual language

of price action—each candle tells a story of how buyers and sellers battled during that time frame.