Analysis
How to Read Candlestick Charts: A Beginner's Guide
Candlesticks turn raw price data into a story about who's winning — buyers or sellers. Once you learn the vocabulary, you can read any market chart.
Anatomy of a candlestick
Each candle summarises price action over a fixed period (1 minute, 1 hour, 1 day, etc.). It has four values:
- Open — first price of the period.
- Close — last price of the period.
- High — highest price traded.
- Low — lowest price traded.
The body is the range between open and close. The thin lines above and below are called wicks (or shadows). A green (or white) candle means price closed higher than it opened; red (or black) means it closed lower.
Key single-candle patterns
- Doji — open and close are almost equal. Signals indecision.
- Hammer — small body, long lower wick. Bullish reversal signal after a downtrend.
- Shooting Star — small body, long upper wick. Bearish reversal signal after an uptrend.
- Marubozu — full body, no wicks. Strong momentum in the candle's direction.
Two-candle patterns
- Bullish Engulfing — a green candle fully engulfs the previous red candle.
- Bearish Engulfing — a red candle engulfs the previous green candle.
- Tweezer Top / Bottom — two candles with matching highs or lows.
How to actually use them
Patterns are context-dependent. A hammer at the bottom of a multi-day sell-off with rising volume is meaningful; the same candle in the middle of a chop range is noise. Combine candles with:
- Trend context (higher timeframe).
- Support/resistance levels.
- Volume confirmation.
- Momentum indicators (RSI, MACD).
Every symbol on NexPrices has a full TradingView chart with candlesticks and drawing tools — open any coin, stock or commodity and click Open → to explore.