Course Content
Candle Anatomy
Candlestick charts are the most popular way to view price data in financial markets. They originated in Japan in the 18th century, developed by a rice trader named Munehisa Homma.
A single candlestick tells you everything that happened during a specific time period: the open, high, low, and close price.
Parts of a Candlestick
- If the close is higher than the open, the body is typically green or white (bullish)
- If the close is lower than the open, the body is typically red or black (bearish)
Anatomy of a Bullish Candle - Open at the bottom of the body - Close at the top of the body - Upper wick extends above the close - Lower wick extends below the open
Anatomy of a Bearish Candle - Open at the top of the body - Close at the bottom of the body - Upper wick extends above the open - Lower wick extends below the close
What Candles Tell You
- Long body = strong buying or selling pressure
- Short body = indecision or low activity
- Long upper wick = sellers pushed price down from the high
- Long lower wick = buyers pushed price up from the low
- Small body with long wicks = "Doji" — market indecision
Timeframes
Each candle represents a fixed time period: - 1M (1 minute) — each candle = 1 minute of trading - 5M (5 minutes), 15M, 1H (1 hour), 4H (4 hours) - 1D (1 day), 1W (1 week), 1 Month
Higher timeframes show more significant price levels. Lower timeframes show more detail.
Why Candlesticks Matter
Candlesticks are the purest form of price data. Unlike indicators, they are not derived from calculations — they are the actual prices being traded. Learning to read candles means learning to read what the market is actually doing.
Pro Tip: When learning to read candles, start with the daily chart. Daily candles filter out the noise of intraday movements and show you the true picture of supply and demand.
In the next lesson, we will explore specific bullish candlestick patterns.