Candlestick charts are one of the most widely used tools in technical analysis. Each candlestick represents price movement over a specific time period, showing the open, high, low, and close (OHLC) prices. The body of the candle shows the range between the open and close, while the wicks (or shadows) extend to the high and low.
A green (or white) candle indicates that the closing price was higher than the opening price — a bullish move. A red (or black) candle indicates that the closing price was lower than the opening price — a bearish move. The length of the body shows the strength of the move, while long wicks suggest price rejection at certain levels.
Common candlestick patterns like the Doji, Hammer, Engulfing, and Morning Star provide signals about potential price reversals or continuations. Traders combine these patterns with support and resistance levels, volume analysis, and other indicators to make more informed trading decisions.