How do you read a candle chart?

Just above and below the real body are the "shadows" or "wicks." The shadows show the high and low prices of that day's trading. If the upper shadow on a down candle is short, it indicates that the open that day was near the high of the day. A short upper shadow on an up day dictates that the close was near the high.

What do the lines on a candle chart mean?

Key Takeaways. Short-lines, or short candles, are candlesticks that have short bodies. This short-body shape indicates that the open and close prices of the security were quite close to another.

How do you read a candle price?

The direction of the price is indicated by the color of the candlestick. If the price of the candle is closing above the opening price of the candle, then the price is moving upwards and the candle would be green (the color of the candle depends on the chart settings).

What is the best candlestick pattern to trade?

What does a long line candle mean?

The long line candles are the candles with a very long real body. The long line candle suggests that there is a very huge difference between the opening and closing prices of the assets. That also means that prices greatly increased or decreased during the trading session.

Candlestick charts: The ULTIMATE beginners guide to reading a candlestick chart

How do you read candlestick charts for day trading for dummies?

Just above and below the real body are the "shadows" or "wicks." The shadows show the high and low prices of that day's trading. If the upper shadow on a down candle is short, it indicates that the open that day was near the high of the day. A short upper shadow on an up day dictates that the close was near the high.

What does the line above the candle mean?

The hollow or filled portion of the candlestick is called “the body” (also referred to as “the real body”). The long thin lines above and below the body represent the high/low range and are called “shadows” (also referred to as “wicks” and “tails”).

How can you tell if a candle is bullish?

When you see three consecutive hollow candlesticks, you will recognise the bullish three line strike. Each candle will have closed higher than the candle before it. Following this pattern you may see a large red candle that opens higher and closes below the opening of the first candle.

What do long candle wicks mean?

– A long wick candle typically occurs when a trend is ending and shortly before there is a price action reversal, forming a fresh opposite trend.

What does it mean when a candle doesn't burn all the way?

If the wick is too small, it might not be able to generate enough heat to melt the wax all the way at the edge of the candle. As a result, even if you give your candle plenty of time on the first burn, you may still end up getting tunneling.

Is bullish red or green?

Summary. A bullish candlestick pattern shows a reversal in the trend of stock prices, from a downward to an upward trend. In the phenomenon, a red candlestick showing a downtrend is completely engulfed by a larger green candlestick showing an uptrend on the next day.

What does a solid green candle mean?

Green candles mean that the current closing price is GREATER than the previous candle's close price. Red candles mean that the current closing price is LOWER than the previous candle's closing price.

What is the most powerful candlestick?

How accurate are candlesticks?

All candlesticks are not reliable, but there are a couple of patterns that are reliable enough to become part of a trading strategy. However, which candlesticks that can be used varies a lot depending on factors like what market you trade, the timeframe, and other conditions that are pertinent to your trading strategy.

What does it mean when black smoke comes out of a candle?

The candle has been burning for too long.

Once the surface is liquid, the inner wax of the candle heats up and begins to evaporate very quickly. The candle is then unstable, causing the flame to burn irregularly. The more the flame moves, the more likely it is to give off soot.

What does a red candle mean?

A red candlestick is a price chart indicating that the closing price of a security is below both the price at which it opened and previously closed. A candlestick may also be colored red if the close is below the prior close, but above the open—in which case it will usually appear hollow.

Why does my candle jar turn black?

Candle glass turns black due to the accumulation of soot. Any type of candle can create soot, though it's more common with certain types of waxes, such as paraffin wax. Soot is created as a result of an incomplete combustion reaction, and it can be caused by several different factors.

How do you read a wick?

The top of the body is where the day closed at. There are also 2 lines that come out from the top and the bottom of the body, they're called candlestick's wick or shadow. The top wick shows the highest the price could reach on that day. The bottom wick shows the lowest the price reached that day.

What does a high wick mean?

If a currency pair closes higher for the period, the body is green; otherwise, it's red. The tip of a top wick is the pair's high price for the period; the tip of a bottom wick shows the period low. Two long wicks indicate that prices ended away from the period's extremes, not evidence of a strong trend.

What is the most bullish candlestick pattern?

Three Line Strike. The bullish three line strike reversal pattern carves out three black candles within a downtrend. Each bar posts a lower low and closes near the intrabar low. The fourth bar opens even lower but reverses in a wide-range outside bar that closes above the high of the first candle in the series.

What does a bullish chart look like?

Bull Flag

A bullish flag pattern occurs when a stock is in a strong uptrend, and resembles a flag with two main components: the pole and the flag. This pattern is a bullish continuation pattern. Typically traders would buy the stock after it breaks above the short-term downtrend, or flag.