Master the language of price action in 5 minutes
A candlestick shows four key price points for a specific time period: Open, High, Low, and Close.
📖 Reading the Candle:
Green/Filled Candle: Price closed HIGHER than it opened (Bullish)
Red/Hollow Candle: Price closed LOWER than it opened (Bearish)
Wicks/Shadows: Show the price extremes reached during the period
Body Size: Shows strength - Bigger body = Stronger move
These individual candles tell important stories about market sentiment. Each pattern has a visual example below.
Open and Close are nearly the same. Shows indecision in the market.
Meaning: Potential reversal when found at tops/bottoms
Look for: Tiny body (or cross shape) with wicks on both sides
REVERSALSmall body at top, long lower wick (2x body). Found at bottoms.
Meaning: Sellers pushed down but buyers took control
Look for: Lower wick at least 2x the body length
BULLISHSmall body at bottom, long upper wick (2x body). Found at tops.
Meaning: Buyers pushed up but sellers took control
Look for: Upper wick at least 2x the body length
BEARISHLong body with little to no wicks. Strong directional move.
Meaning: Very strong buying/selling pressure
Look for: Almost no wicks - price moved one direction all day
CONTINUATIONSmall body with long wicks on both sides. Shows indecision.
Meaning: Battle between bulls and bears, no winner yet
Look for: Small body with wicks extending equally in both directions
INDECISIONVery long wick with small body. Price was rejected at that level.
Meaning: Strong support/resistance at that price
Look for: Wick is 3-5x longer than the body - extreme rejection
REVERSALDoji: The body is almost a line - open and close prices are nearly identical
Hammer/Shooting Star: The wick should be at least 2x the body size
Marubozu: The candle is almost all body with tiny or no wicks
Spinning Top: Small body with wicks extending equally on both sides
Rejection: One wick is extremely long (3-5x body) showing price was aggressively pushed back
When multiple candles combine, they create powerful reversal or continuation signals.
Second candle completely "engulfs" the previous candle's body.
Bullish: Green candle engulfs red = Reversal up
Bearish: Red candle engulfs green = Reversal down
REVERSAL3-candle pattern: Red → Small body → Large green
Meaning: Downtrend ending, bulls taking over
Look for: Gap down between candles (if present)
BULLISH REVERSAL3-candle pattern: Green → Small body → Large red
Meaning: Uptrend ending, bears taking over
Look for: Gap up between candles (if present)
BEARISH REVERSALThree consecutive large green candles with higher closes.
Meaning: Very strong bullish momentum
Look for: Each candle opens within previous body and closes higher
CONTINUATIONThree consecutive large red candles with lower closes.
Meaning: Very strong bearish momentum
Look for: Each candle opens within previous body and closes lower
CONTINUATIONTwo candles with matching highs (top) or lows (bottom).
Meaning: Price tested level twice and rejected
Look for: The highs (or lows) should be at the same price level
REVERSALEngulfing: The second candle's body must completely cover the first candle's body
Morning/Evening Star: Look for 3 candles - large, small, large in opposite directions
Three Soldiers/Crows: Each candle should open within previous body and step higher/lower
Tweezer: Two candles with matching high points (tops) or low points (bottoms)
Confirmation: Always wait for the pattern to complete before entering a trade!
The same candle pattern means different things depending on where it appears.
Hammer at bottom of downtrend = Bullish reversal likely
Shooting star at top of uptrend = Bearish reversal likely
Engulfing at support/resistance = Strong confirmation
Hammer in middle of uptrend = Not significant
Doji during low volume = May be noise, not reversal
Any pattern without volume = Unreliable
Always check volume: A bullish engulfing with 3x average volume is WAY more reliable than one with weak volume. High volume = institutions are involved.
Daily candles are more reliable than 5-minute candles. Higher timeframes filter out noise and show true market direction.
1. Look for reversal patterns at key support/resistance levels on daily charts
2. Wait for engulfing candles or morning/evening stars
3. Confirm with volume spike (2x+ average)
4. Enter on next candle if pattern holds
1. Watch 1-min or 5-min candles for quick reversals
2. Look for rejection wicks at VWAP or EMAs
3. Enter immediately on strong directional candles (marubozu)
4. Exit fast - hold for just a few candles
❌ Trading patterns in isolation without support/resistance
❌ Ignoring volume - high volume = real moves
❌ Using only candles - combine with indicators (RSI, MACD, etc.)
❌ Trading every pattern you see - wait for high-probability setups
❌ Forgetting the bigger trend - don't fight the 4H/Daily trend
Long body: Strong conviction, big moves
Short body: Weak conviction, indecision
Long upper wick: Sellers rejected higher prices
Long lower wick: Buyers rejected lower prices
Green/White/Filled: Bulls won (Close > Open)
Red/Black/Hollow: Bears won (Close < Open)
The best trades combine candlestick patterns + support/resistance + volume + momentum indicators. Never trade on candlesticks alone!
Now that you understand candlesticks, here's how to practice:
1. Paper Trade: Use our paper trading simulator to practice without risk
2. Review Charts: Look at historical charts and identify patterns that worked
3. Live Alerts: Watch our live alerts to see patterns in real-time
4. Start Small: When ready for real trading, start with small positions