📝 Candlestick Chart Basics
🌟 What is a Candlestick Chart?
Imagine you are running a small vegetable shop. 🥦🍅
At the end of the day, you note 4 things about the onion price:
1️⃣ Opening Price – Price when the market/shop opened.
2️⃣ Closing Price – Price when the market/shop closed.
3️⃣ Highest Price – Maximum price reached during the day.
4️⃣ Lowest Price – Minimum price reached during the day.
A Candlestick Chart shows exactly this for stocks! 📊
🔍 Why is it Called a Candlestick?
Because every price bar looks like a candle with a stick 🕯️:
✔️ Body (Thick part) – Shows the price range between Open and Close.
✔️ Wick/Shadow (Thin lines above and below) – Shows the Highest and Lowest prices.
🎨 Colours of the Candle:
1️⃣ Green/White Candle (Bullish) — When Closing Price is higher than Opening Price = Price went up. 📈
Example: Open ₹100, Close ₹120 — Green Candle! 💚
2️⃣ Red/Black Candle (Bearish) — When Closing Price is lower than Opening Price = Price went down. 📉
Example: Open ₹100, Close ₹80 — Red Candle! ❤️
🛠️ Parts of a Candle:
✔️ Upper Wick (Shadow) — Shows how high the price went.
✔️ Body — Shows the open and close price (main area).
✔️ Lower Wick (Shadow) — Shows how low the price went.
🎯 Example to Understand:
👦 You sell apples 🍎 in a market.
✔️ Morning (Open Price): ₹50/kg
✔️ Highest during day: ₹70/kg
✔️ Lowest during day: ₹45/kg
✔️ Evening (Close Price): ₹65/kg
👉 This day will form a Green Candle, because you closed at ₹65 which is more than ₹50 (opening).
✔️ The candle’s body will be between ₹50 and ₹65.
✔️ The upper wick will show ₹70 (highest price).
✔️ The lower wick will show ₹45 (lowest price).
🧠 What Can You Learn From Candlesticks?
✔️ Is the market bullish (going up) or bearish (going down)?
✔️ Are the buyers strong or sellers strong?
✔️ Is there any trend reversal coming? (When trend changes direction)
🚨 Common Candlestick Patterns:
1️⃣ Doji – Open and Close price are almost the same. Market is confused! 🤔
2️⃣ Hammer – Small body, long lower wick. Buyers trying to push price up! 🛠️
3️⃣ Shooting Star – Small body, long upper wick. Sellers may bring price down! 🌠
These are just a few — there are 100+ patterns that traders study to predict market moves! 🔮
⚠️ Things to Remember:
✔️ One single candle does NOT give the full story. Always check multiple candles to understand the full chart.
✔️ Combine Candlestick Chart with volume and indicators (like RSI, MACD) for better prediction.
💡 Final Thoughts:
✔️ Candlestick Charts are like a secret language of the market — they tell you who is winning: buyers or sellers! 😉
✔️ Every trader must learn reading candles — it’s the first step in technical analysis! 🕯️📊
✅ Keep practicing — after some time, these candles will start telling you stories themselves! 📖
🛡️ Disclaimer:
⚠️ 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. 📢