🕯 Candlestick Basics
Part of Complete Stock Market Learning Series
📌 What is a Candlestick?
A candlestick is a price chart representation that shows the Open, High, Low, and Close (OHLC) of a stock for a specific time period.
It helps traders understand market psychology and price movement clearly.
🕯 Structure of a Candlestick
- Body – Shows Open and Close price
- Upper Shadow (Wick) – Shows the highest price
- Lower Shadow (Wick) – Shows the lowest price
The body tells who won the battle — buyers or sellers.
📈 Types of Candles
- Bullish Candle – Close price is higher than Open price
- Bearish Candle – Close price is lower than Open price
Bullish candles indicate buying strength, while bearish candles indicate selling pressure.
⏳ Time Frame Matters
Candlesticks can represent different time frames:
- 1 Minute
- 5 Minutes
- 1 Hour
- 1 Day
- 1 Week
Longer time frames provide stronger signals for long-term traders.
📊 Why Candlestick Charts Are Popular?
- Easy to read price action
- Shows market sentiment visually
- Helps identify reversal patterns
- Useful for entry & exit decisions
Most professional traders use candlestick charts for technical analysis.
⚠ Common Beginner Mistakes
- Trading based on single candle
- Ignoring trend direction
- Not confirming with volume
- Using too small time frames
Always combine candlestick analysis with trend and support/resistance levels.
⚖ Important Note
Candlestick patterns are powerful but not 100% accurate. Use proper risk management and stop-loss while trading. This content is for educational purposes only.
🚀 Learn Price Action Trading Step by Step
Understanding candlestick basics is the foundation of technical analysis. We teach practical trading strategies with real chart examples.
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