Reading candlestick charts
How a candle is built, what the body and wicks say about buyers and sellers, and the handful of patterns worth knowing.
1. Anatomy of a candle
A candlestick summarises price over one period (1 minute, 5 minutes, 1 day) with four numbers: open, high, low and close (OHLC).
- The body runs from open to close. Green (or hollow) means close above open; red (or filled) means close below open.
- The wicks (shadows) show the high and the low that were reached but not held.
- A long body means one side was in control all period. A small body means a tug of war.
Every candle tells a short story: where price started, how far each side pushed it, and who won by the end.
2. Timeframes change the story
The same move looks different on different timeframes. A sharp red 5-minute candle can be a tiny wick on the daily chart.
A common approach is to decide direction on a higher timeframe (daily or 1 hour) and time entries on a lower one (15 or 5 minutes). Signals on higher timeframes carry more weight because they contain more trading.
On ExpertView instrument pages, switch between 1m, 5m, 15m, 1h and 1D to see the same move at different scales.
3. Single-candle patterns
| Pattern | Shape | What it suggests |
|---|---|---|
| Doji | Open and close almost equal | Indecision; matters most after a strong move |
| Hammer | Small body at top, long lower wick | Sellers pushed down, buyers pushed back; possible support |
| Shooting star | Small body at bottom, long upper wick | Buyers pushed up, sellers pushed back; possible resistance |
| Marubozu | Big body, little or no wick | One side dominated the whole period |
A pattern on its own is weak evidence. It becomes more meaningful at a level that already matters, such as yesterday's high, a round number or a heavy open-interest strike.
4. Two- and three-candle patterns
- Bullish engulfing: a green body completely covers the previous red body. Buyers overwhelmed sellers.
- Bearish engulfing: the opposite, a red body swallowing the prior green one.
- Inside bar: a candle whose whole range sits inside the previous one. Compression that often precedes a bigger move.
- Morning star / evening star: a strong candle, a small indecisive one, then a strong candle the other way. A three-step reversal.
Look for confirmation: the next candle should follow through. A bullish engulfing followed by a close below its low has failed.
5. Volume and context
Volume shows how much participation stood behind a candle. A breakout candle on heavy volume is more convincing than the same candle on thin volume.
Always ask three questions before reading a pattern: What is the trend? Where is price relative to key levels? Is volume supporting the move?
Candlestick patterns describe what has happened. They are not predictions. Treat them as clues to combine with levels, trend and risk management.
Key takeaways
- Each candle shows open, high, low and close for one period.
- Bodies show who won; wicks show where one side tried and failed.
- Patterns mean most at levels that already matter, with volume behind them.
- Wait for confirmation from the next candle before trusting a reversal pattern.
Try it on ExpertView: Study live Nifty candles on every timeframe →
From ExpertView's free courses at expertview.in/learn. For study and educational use. Not investment advice. Rules, lot sizes, taxes and timings change; check the latest from NSE, MCX, SEBI and the Income Tax Department.