๐ Candlestick Chart Basics
๐ What is a Candlestick Chart?
Imagine you are running a small vegetable shop. ๐ฅฆ๐
At the end of the day, you note 4 things about the onion price:
1๏ธโฃ Opening Price โ Price when the market/shop opened.
2๏ธโฃ Closing Price โ Price when the market/shop closed.
3๏ธโฃ Highest Price โ Maximum price reached during the day.
4๏ธโฃ Lowest Price โ Minimum price reached during the day.
A Candlestick Chart shows exactly this for stocks! ๐
๐ Why is it Called a Candlestick?
Because every price bar looks like a candle with a stick ๐ฏ๏ธ:
โ๏ธ Body (Thick part) โ Shows the price range between Open and Close.
โ๏ธ Wick/Shadow (Thin lines above and below) โ Shows the Highest and Lowest prices.
๐จ Colours of the Candle:
1๏ธโฃ Green/White Candle (Bullish) โ When Closing Price is higher than Opening Price = Price went up. ๐
Example: Open โน100, Close โน120 โ Green Candle! ๐
2๏ธโฃ Red/Black Candle (Bearish) โ When Closing Price is lower than Opening Price = Price went down. ๐
Example: Open โน100, Close โน80 โ Red Candle! โค๏ธ
๐ ๏ธ Parts of a Candle:
โ๏ธ Upper Wick (Shadow) โ Shows how high the price went.
โ๏ธ Body โ Shows the open and close price (main area).
โ๏ธ Lower Wick (Shadow) โ Shows how low the price went.
๐ฏ Example to Understand:
๐ฆ You sell apples ๐ in a market.
โ๏ธ Morning (Open Price): โน50/kg
โ๏ธ Highest during day: โน70/kg
โ๏ธ Lowest during day: โน45/kg
โ๏ธ Evening (Close Price): โน65/kg
๐ This day will form a Green Candle, because you closed at โน65 which is more than โน50 (opening).
โ๏ธ The candleโs body will be between โน50 and โน65.
โ๏ธ The upper wick will show โน70 (highest price).
โ๏ธ The lower wick will show โน45 (lowest price).
๐ง What Can You Learn From Candlesticks?
โ๏ธ Is the market bullish (going up) or bearish (going down)?
โ๏ธ Are the buyers strong or sellers strong?
โ๏ธ Is there any trend reversal coming? (When trend changes direction)
๐จ Common Candlestick Patterns:
1๏ธโฃ Doji โ Open and Close price are almost the same. Market is confused! ๐ค
2๏ธโฃ Hammer โ Small body, long lower wick. Buyers trying to push price up! ๐ ๏ธ
3๏ธโฃ Shooting Star โ Small body, long upper wick. Sellers may bring price down! ๐
These are just a few โ there are 100+ patterns that traders study to predict market moves! ๐ฎ
โ ๏ธ Things to Remember:
โ๏ธ One single candle does NOT give the full story. Always check multiple candles to understand the full chart.
โ๏ธ Combine Candlestick Chart with volume and indicators (like RSI, MACD) for better prediction.
๐ก Final Thoughts:
โ๏ธ Candlestick Charts are like a secret language of the market โ they tell you who is winning: buyers or sellers! ๐
โ๏ธ Every trader must learn reading candles โ itโs the first step in technical analysis! ๐ฏ๏ธ๐
โ
Keep practicing โ after some time, these candles will start telling you stories themselves! ๐
๐ก๏ธ Disclaimer:
โ ๏ธ Disclaimer: The content provided on this website is for educational and informational purposes only. It should not be considered as investment advice, stock tips, or financial recommendations. Always do your own research or consult a SEBI-registered investment advisor before making any trading or investment decisions. ๐ข