Japanese candlesticks are the most popular way to display price. Each candle covers a period and shows four prices: open, close, high, low.

Anatomy

  • Body: open-to-close. Green = close above open (bullish); red = close below (bearish).
  • Wicks: the high and low reached.

Reading it

A large body = strong control by one side. A long lower wick = rejection of lower prices (buying pressure); a long upper wick = rejection of higher prices.

Three common patterns

  • Hammer: small body, long lower wick after a drop → possible bullish reversal.
  • Bullish Engulfing: a big green candle engulfs the prior red one → buying strength.
  • Doji: open ≈ close → indecision, may precede a reversal.