If you’ve ever opened a trading chart and thought, “what in the world am I even looking at…?” — you’re not alone. Candlestick charts can seem intimidating at first, but once you understand how they work, they become a powerful tool for spotting price momentum, trend shifts, and market sentiment.

I’ll try to break it all down in the simplest way possible.

Just incase you’re more of a visual learner, here’s a Youtube video explaining candlestick patterns in depth

🔍 What Are Candlestick Charts?

Each candlestick shows how a stock or asset moved during a certain time period — like a day, hour, or even a minute. It tells you four key things:

• Open: Where the price started

• Close: Where the price ended

• High: The highest price reached

• Low: The lowest price reached

The body (the thick part of the candle) shows the range between the open and close. The wicks (lines above and below the body) show how high and low price moved during that time.

🔑 Why Learn Candlestick Patterns?

Candlestick patterns are crucial because they can signal potential market reversals or continuations. Recognizing these patterns allows traders to make informed decisions about entry and exit points. For instance, a “hammer” pattern might indicate a bullish reversal, suggesting a good time to buy.

🟩 Green vs. 🟥 Red Candles

• A green candle means price went up. It opened low and closed higher.

• A red candle means price went down. It opened high and closed lower.

Simple!

🧠 What Candles Reveal About the Market’s “Mood”

• A big candle body = strong momentum. Price moved a lot.

• A small candle body = weak momentum or indecision.

• A Doji (tiny or no body) = the market couldn’t decide who’s in control — buyers or sellers.

📊 Candlesticks Reflect Price Action

Candlesticks tell a story. They show how buyers and sellers were behaving during that time. Traders use these patterns to spot reversals, breakouts, and trend strength — it’s called price action trading.

⏱️ Timeframes Matter

• On a daily chart (1D), each candle = one day of price movement.

• On a 1-hour chart (1H), each candle = one hour.

The timeframe you use depends on your trading style — swing traders usually use daily and 4HR charts, while day traders focus on smaller timeframes like the 5-minute for entries while still paying attention to larger timeframes to tell the bigger story.

*For beginners, I’d recommend using TradingView for the best UX/UI. I personally don’t recommend beginners to use Think or Swim since it has a steep learning curve, and I don’t want you to be discouraged from learning. You can always switch later if necessary.

🧠 What Is Price Action?

Price action is just a fancy way of saying: “watching how price moves over time.”

You’re not using indicators. You’re not running formulas. You’re simply observing how buyers and sellers are behaving on the chart through candlesticks.

Some things price action traders look for:

• Is the price making higher highs and higher lows? (That’s bullish.)

• Are there long wicks or indecision candles at key levels? (That might signal a reversal.)

• Is the market breaking support/resistance or rejecting it?

When you combine candlesticks + price action, you start seeing the story behind the chart, not just lines and colors.

You don’t need to memorize every candlestick pattern.

Just ask: “What is price doing here and what is it telling me about who’s in control?”

📈 Reading Real Candles (Example with AAPL)