📊 Charts & Technical Analysis · Lesson 2 of 9 · 9 min
Reading Candlesticks
🕯️ A candlestick looks like a tiny floating lightsaber. Decode it and a single candle tells you who won that day's fight — buyers or sellers — and exactly how badly.
💡 Key idea
Body = open-to-close. Green = buyers won, red = sellers won. Wicks = the high/low extremes that got rejected.
🧠 Why it matters
Each candle covers one time period (a day, an hour, etc.) and shows four prices. The thick BODY spans the OPEN and CLOSE. A GREEN (or white) body means price closed HIGHER than it opened — buyers won. RED (or black) means it closed LOWER — sellers won. The thin WICKS (shadows) above and below mark the HIGH and LOW reached. Long wicks mean a level was fought over and rejected.
🌍 In the real world
💡 A candle with a tiny body and a long lower wick is a 'hammer' — sellers shoved price way down, but buyers slammed it back up by the close. It often hints sellers are exhausted. One candle, a whole story.
📌 Takeaways
- Body = the open-to-close range
- Green body = close above open (buyers); red = sellers
- Long wicks = rejected highs/lows — a sign of a fight
📖 Terms in this lesson
Candlestick: A chart shape showing a period's opening, closing, highest and lowest prices.
✅ Test yourself
A GREEN candle body means price...
- Closed lower than it opened
- Closed higher than it opened
- Didn't move
- Hit a new low
Answer: B · Closed higher than it opened
Green (or white) = close above open, so buyers controlled that period.
What do the thin wicks on a candle show?
- The open and close
- The high and low reached
- The volume
- Tomorrow's price
Answer: B · The high and low reached
Wicks (shadows) mark the highest and lowest prices touched during the period.
A long LOWER wick suggests...
- Buyers pushed price back up from the lows
- The stock is worthless
- Nothing happened
- Sellers are in full control
Answer: A · Buyers pushed price back up from the lows
Price was driven down but buyers fought it back up by the close — often a sign sellers are losing steam.
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