Candlestick Anatomy and What Each Candle Tells You
Every candlestick is a compressed story of the battle between buyers and sellers. Learning to read that story is the foundation of price action trading.
The Four Data Points
Every candlestick contains four pieces of information: the open, high, low, and close. From these four numbers, you can reconstruct the entire narrative of that period — where price started, how far buyers pushed it, how far sellers pushed it, and where it ultimately settled.
The Body
The body of the candle represents the range between the open and close. A bullish (green) candle closes above its open — buyers won. A bearish (red) candle closes below its open — sellers won. A large body relative to the candle range indicates strong conviction.
The Wicks
Wicks represent rejection. An upper wick shows that price attempted to go higher but was pushed back — seller rejection. A lower wick shows buyer rejection of lower prices. Long wicks at key levels are among the most reliable price action signals in forex.
Doji Candles
A doji has virtually no body — open and close at or near the same price. At extremes (after a long trend or at a key level), a doji signals indecision and potential reversal. Types include: standard doji, long-legged doji, gravestone doji (long upper wick — bearish at resistance), and dragonfly doji (long lower wick — bullish at support).
Marubozu Candles
A marubozu has no wicks — the open is the low (bullish) or high (bearish) and the close is the opposite extreme. One side dominated the entire period. Bullish marubozu in a trend confirms strong impulse buying.
Context Is Everything
A candlestick in isolation is meaningless. Its meaning comes from its location — at support or resistance, after a trend, at a Fibonacci level. The same pin bar is bullish at support and irrelevant mid-range. Always ask where before asking what.
Every candlestick is a battle report. Read who won, by how much, and where the battle happened.