How to Read Candlesticks

Reading candlesticks starts with understanding each candle's four prices: open, high, low, close. The body shows the range between open and close; the wicks show the full range. Multiple candles together form patterns that traders use for signals.

1. Identify the timeframe (e.g. 1H, 4H). Each candle represents one period.
2. Look at the body: large body = strong move; small body = indecision.
3. Look at the wicks: long lower wick = buyers stepped in; long upper wick = sellers rejected higher prices.
4. Compare consecutive candles for patterns like engulfing or doji.

Bullish engulfing: a green candle that fully engulfs the previous red candle. Doji: open equals close, indicating indecision. Hammer: small body at top, long lower wick, often a reversal signal.