How to Read “One-Candle Signals”

Some traders—especially those working on very short timeframes—pay close attention to the story a single candle can tell. Learning these “one-candle signals” can be a useful skill for beginners. Below are four of the most common ones:

Long Upper Shadow – Often seen as a bearish sign. It suggests traders are taking profits and selling off. The longer the upper shadow, the stronger the bearish pressure.

Long Lower Shadow – Typically a bullish sign, showing buyers are stepping in and pushing prices upward. The longer the lower shadow, the more dependable the signal.

Doji Candle – Has no body because the open and close prices are identical. This signals indecision in the market and may hint at an upcoming reversal. (Fun fact: “Doji” comes from Japanese candlestick charting in the 18th century, meaning “error,” since exact open and close prices are rare.)

Umbrellas – Candles with a long lower wick.

A red umbrella is called a hammer, often signaling strong buying interest and a possible price bounce upward.

A green umbrella is nicknamed a hanging man, which can indicate sellers are preparing to exit—potentially ending an uptrend.

Remember: While one-candle patterns can provide valuable hints, they’re just one part of the puzzle. A proper market read requires looking at the bigger picture and recognizing broader patterns. If you’re unsure about your trading strategy, it’s always wise to seek professional advice.