Anatomy of a single candle
Each candlestick represents one slice of time — one minute, one hour, one day — and encodes four prices: the open (price at the start), the close (price at the end), and the high and low reached during that period.
The thick part is the body, drawn between the open and close. A bullish candle (commonly green or white) closes higher than it opened; a bearish candle (red or black) closes lower. The body’s size tells you how decisively price moved.
The thin lines above and below are the wicks (or shadows). The upper wick reaches to the high, the lower wick to the low. Long wicks show that price was pushed to an extreme and then rejected — a sign of a battle between buyers and sellers.
What body and wick size tell you
A long body with small wicks signals conviction — one side dominated the whole period. A long green body means buyers were in control; a long red body means sellers were. These often appear during strong trends.
A small body with long wicks signals indecision or a struggle. Price travelled far in both directions but closed near where it started. After an extended move, this hesitation can foreshadow a pause or reversal.
Context is everything: the *same* candle means different things at the top of a rally versus the bottom of a sell-off. Always read a candle relative to the trend and the levels around it, never in isolation.
Key single-candle patterns
A doji has almost no body — open and close are nearly equal — showing indecision. After a strong trend, a doji warns that momentum may be stalling.
A hammer has a small body near the top with a long lower wick, appearing after a decline; it suggests sellers pushed price down but buyers fought back, hinting at a potential bottom. Its inverse near a top is the shooting star (small body, long upper wick), hinting at a potential top.
These are hints, not guarantees. A single candle is a clue; reliable traders wait for confirmation — the next candle, a key level, or supporting volume — before acting on it.
Multi-candle patterns to know
The bullish engulfing pattern is a large green candle whose body completely covers the prior red candle — a shift of control from sellers to buyers, often near support. Its mirror, the bearish engulfing, signals the reverse near resistance.
Patterns like morning star and evening star (three-candle reversal sequences) build on the same logic: a strong move, a small indecisive candle, then a decisive move the other way. They carry more weight than any single candle because they show a clearer change in momentum.
Don’t memorise dozens of patterns at once. Master a handful — doji, hammer, engulfing — and learn to read them at meaningful support and resistance levels, where they actually matter.
How to practice and journal candlesticks
Reading candles is a skill built by repetition. Pull up a chart, hide the right side, and predict the next move from the candles you can see — then reveal the outcome. Doing this hundreds of times trains pattern recognition far faster than reading about it.
Just as important: journal your trades and observations. Record which patterns you traded, the context (trend, level), what you expected, and what actually happened. Over time the journal reveals which patterns work *for you* and which you should ignore — the difference between guessing and having an edge.
A trading journal like TradeZella automates much of this: it logs your trades, tags setups, and surfaces statistics on which patterns and conditions are actually profitable for you. Whether you use a tool or a spreadsheet, the habit of reviewing is what turns chart-reading into consistent trading.