Level 2: Reading the MarketInteractive
Anatomy of a Candlestick
15 min readUpdated Mar 2026
Quick Check
The body of a candlestick shows:
Wicks (shadows) represent:
The body of a candlestick shows:
Wicks (shadows) represent:
A is a visual representation of price movement over one time period. Each candle on a daily chart = one trading day. Every candlestick encodes four values, known as :
The body (thick rectangle) spans Open to Close. The wicks (thin lines) extend to the High and Low.
Three-Question Read
For any candle, ask: (1) Who won, buyers or sellers? (body color) (2) How decisive? (body size) (3) Was there a fight? (wick length).
A green candle is not always bullish. A small green candle after a long downtrend with a long upper wick may be bearish. Sellers still control, and the bounce was rejected.
The rule: Never read a single candle in isolation. Always consider the trend and surrounding candles.
Gaps between candles reveal overnight sentiment:
Higher = More Reliable
A visible on the weekly chart carries more weight than one only on the hourly. When in doubt, trust the higher timeframe.
All 40 candlestick and chart patterns in 4K. Print it and keep it next to your charts.
Key Takeaways
Try This
Pull up a daily chart and describe the last 5 candles: bullish or bearish? Large or small body? Long or short wicks? Start reading candles like sentences in a story.
Swingfolio's chart analysis tools help you identify candlestick patterns in real time across your watchlist.
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This educational content is for informational purposes only and does not constitute financial advice. Past performance is not indicative of future results. Trading involves risk of loss. You should consult a qualified financial advisor before making investment decisions. Swingfolio is a trade journaling tool, not a financial advisory service.