How to Read Candlestick Charts
Each candle sums up one trading day: where the price opened, the highest and lowest it reached, and where it closed. The thick body runs from open to close; the thin lines (wicks) show the high and low. Green means it closed above the open, red means it closed below.
How it's calculated
Nothing to calculate: it's the four daily prices drawn together. In this game they're rescaled so the close before session 1 equals 100.
How traders use it
Traders look at the size of bodies and wicks. A long lower wick means sellers pushed the price down but buyers brought it back. Many small bodies in a row suggest indecision; a run of large bodies in one direction suggests a strong move.
What people say
The method comes from Japanese rice traders in the 18th century, usually credited to Honma Munehisa. Named patterns like “hammer” or “engulfing” are popular, but on their own they are unreliable; most traders read them together with trend and volume.
Practise with this indicator
Open a real hidden-stock chart with only this indicator turned on and see if it helps you beat the market.
Skip the crap and play →