Understanding Candlestick Patterns — A Beginner’s Guide
Candlestick charts pack open, high, low and close into one shape. Here are the basics and a few key patterns.
On this page
A candlestick shows four prices for a period — open, high, low and close — in a single shape. The “body” spans open to close; the thin “wicks” show the high and low. Green/white means price rose; red/black means it fell.
Why traders use them
Candlesticks reveal the tug-of-war between buyers and sellers at a glance, which is why they underpin most technical analysis. Learn to read a chart in our how to read stock charts guide.
A few classic patterns
- Doji — open and close nearly equal; signals indecision.
- Hammer — small body, long lower wick; a possible bullish reversal after a fall.
- Engulfing — a large candle that swallows the previous one; a strong reversal signal.
- Marubozu — a full body with no wicks; strong one-sided momentum.
Use with context
Patterns are more reliable near support and resistance and when confirmed by volume. No pattern is a guarantee — they shift probabilities, not certainties. Combine them with a plan and a stop-loss.
This is educational content, not a trading recommendation.
