What you'll learn
- Identify open, high, low and close on a candle
- Read body and wick size as strength and rejection
- Recognise a few informative single-candle shapes
The four prices
On a bullish candle, the open is the bottom of the body and the close the top. On a bearish candle it is the reverse. The upper wick reaches the high and the lower wick the low. If there is no wick, the period opened or closed at its extreme, which is itself a signal of one-sided momentum.
What the shape says
| Shape | Reads as |
|---|---|
| Long body, short wicks | Strong directional move; buyers or sellers in control throughout |
| Small body, long wicks both sides (doji, spinning top) | Indecision; a fight that ended level |
| Small body at the top, long lower wick (hammer) | Sellers pushed down and were rejected; possible reversal up after a decline |
| Small body at the bottom, long upper wick (shooting star) | Buyers pushed up and were rejected; possible reversal down after a rally |
| Body that engulfs the previous candle's body | Momentum shift; the new candle overwhelmed the last |
Context is everything
A hammer at the bottom of a decline at a support level on a daily chart is worth attention. The same shape in the middle of a range on a five-minute chart is noise. Candle shapes describe what happened in one period; whether it matters depends on where it happened, which the lessons on structure and levels supply.
A caution
Candlestick pattern lists run to dozens of named shapes with poetic names. Most have no demonstrated edge on their own. Learn to read bodies and wicks as strength and rejection, learn the handful above, and treat the rest as vocabulary rather than signals.
Key takeaways
- Body is open to close; wicks are the extremes.
- Long body means strength; long wick means rejection; small body with wicks means indecision.
- Hammer, shooting star and engulfing candles are the shapes worth knowing.
- A candle means little without the level and trend around it.
Knowledge check
Trading forex, CFDs and other leveraged products carries a high risk of losing money. This lesson is general education, not advice. Risk disclosure.