How to read Candlestick chart?

If you are going to step in the world of trading the very first thing that you need to learn is how to read a candlestick chart. This has been predominantly used around the globe and is considered the most reliable source of information.

If you know how to interpret candlestick chart patterns you can communicate with the market trends.




ideal candle

This is the idle candlestick most probably all of us have seen. The color interprets the type of candle. With green color is the bullish candle while the red one is a bearish candle.

However, technology has made the choice of color in the hand of traders. If you find the green color not suitable for you, you can change the bullish candles of the color of your choice.

candle naming

The solid colored part of the candle is the main body while the two lines above and below are called a shadow.
This candles can be a day, hour, minute or even week, month or year. It depends on the time frame which you chose to analyze the share price.



Basic 4 elements of information that candlestick shows are


1) Open: The price at which market opens. This is the price at which the very first trade starts.
2) Close: The price in which the market was closed. This is basically the last traded price
3) High: This is the highest price high made by the stock during that period.
4) Low: This is the lowest price fall made by the stock during the same period.

 

candlestick naming

The hidden Interpretation


This is the numerical part of the candlestick but not the most relevant part.  The actual interpretation what you need to make is explained further.

Just have a look at the image presented below

price variation


This is the price variation of a stock from 10 am to 3 pm in a single day.

So apart from the price variation, the interpretation of the scene shows the market sentiments flowing in the time period. The war between the buyers and sellers and how they dominate the market can be interpreted here.

The 4 key interpretations of candlestick are

1) The region above dotted line is bullish region while below is bearish region
2) When body goes below dotted line, this means sellers are dominating the market
3)When body goes above the dotted line then buyers are dominating the market
4) The region where close price stands show who won the fight between buyers and sellers. In this case it, after all, it made high and low the buyers won the fight and market end on the bullish side.

Want to know the other signals from candlestick chart Click Here




Bottom line

So every candle has a story that they want to say. With bullish candles buyers are buying more and sellers are unable to compete for the order of buyers. So the buyers are optimistic here.
While in bearish candle the buyers cannot compete for the order of sellers and are fearful of buying more. While sellers keep selling the shares.

So understanding the psychology of today you can predict the behavior of traders the very next day. This helps you predict the direction of the market and now you need to judge what you want to do at this particular stage.

Post Author: Sushant Putatunda

37 thoughts on “How to read Candlestick chart?

    Catina Rayne

    (June 5, 2017 - 2:35 am)

    I absolutely love your website.. Very nice colors & theme. Did you make this amazing site yourself? Please reply back as I’m hoping to create my very own website and would like to find out where you got this from or just what the theme is called. Appreciate it!|

    Joanie Muhlstein

    (June 5, 2017 - 5:30 am)

    Hello, Neat post. There is a problem with your site in web explorer, could check this? IE still is the market chief and a big portion of other people will miss your wonderful writing because of this problem.|

    Bertram Weal

    (June 5, 2017 - 5:30 am)

    I loved as much as you will receive carried out right here. The sketch is tasteful, your authored material stylish. nonetheless, you command get got an shakiness over that you wish be delivering the following. unwell unquestionably come more formerly again since exactly the same nearly very often inside case you shield this hike.|

    Fritz Steenbergen

    (June 5, 2017 - 5:30 am)

    Fascinating blog! Is your theme custom made or did you download it from somewhere? A theme like yours with a few simple tweeks would really make my blog stand out. Please let me know where you got your theme. Thanks|

    Evelina Grunder

    (June 5, 2017 - 5:51 am)

    Excellent post however I was wanting to know if you could write a litte more on this topic? I’d be very grateful if you could elaborate a little bit more. Thank you!|

    Marybelle Theesfeld

    (June 5, 2017 - 5:51 am)

    Yes! Finally someone writes about keyword1.|

    Allyn Stoica

    (June 5, 2017 - 5:51 am)

    Hi there, for all time i used to check web site posts here in the early hours in the break of day, because i like to gain knowledge of more and more.|

    Rory Randhawa

    (June 7, 2017 - 2:29 pm)

    My partner and I stumbled over here by a different website and thought I might check things out. I like what I see so now i am following you. Look forward to exploring your web page for a second time.|

      Sushant Putatunda

      (June 12, 2017 - 3:17 pm)

      Thanks, do continue reading our posts.

    Shannon Slimmer

    (June 7, 2017 - 5:33 pm)

    Fantastic items from you, man. I have be aware your stuff previous to and you’re just too wonderful. I actually like what you’ve obtained here, certainly like what you’re saying and the best way in which you are saying it. You are making it entertaining and you still care for to keep it wise. I cant wait to read much more from you. This is actually a tremendous web site.|

      Sushant Putatunda

      (June 12, 2017 - 3:15 pm)

      Thanks for the appreciation, do continue reading our posts.

    Ahmad Lessmann

    (June 7, 2017 - 5:54 pm)

    I think this is one of the most significant info for me. And i’m glad reading your article. But want to remark on some general things, The site style is perfect, the articles is really great : D. Good job, cheers|

      Sushant Putatunda

      (June 12, 2017 - 3:14 pm)

      Thanks for the appreciation, do continue reading our posts.

    Renita Crook

    (June 7, 2017 - 5:54 pm)

    My family always say that I am killing my time here at net, except I know I am getting know-how everyday by reading such good posts.|

      Sushant Putatunda

      (June 12, 2017 - 3:11 pm)

      Thanks for the comment, do continue reading our posts.

    Aurelio Turnball

    (June 7, 2017 - 5:54 pm)

    This website was… how do I say it? Relevant!! Finally I have found something which helped me. Thanks!|

      Sushant Putatunda

      (June 12, 2017 - 3:10 pm)

      Hi! Thanks for the appreciation. Happy to know that our post could help you. Please continue reading our posts.

    karatkreations

    (June 15, 2017 - 4:35 am)

    Thanks for easy explanation and sharing knowledge.

    Google

    (July 3, 2017 - 12:45 am)

    Google

    Here are a few of the internet sites we advise for our visitors.

    agen judi bola indonesia

    (July 3, 2017 - 11:50 am)

    Pretty nice post. І just stumbled uoon youг blog and wɑnted to ѕay tһat I’ve
    really enjoyed browsing your blog posts. After all Ӏ’ll ƅe subscribing tо your rss feed aand Ӏ hoppe you
    write again veгy ѕoon!

    www.mypokersoda.Com

    (July 3, 2017 - 10:48 pm)

    Spot on wijth tһis write-ᥙp, I absolutly Ьelieve this web site neds а lot
    mpre attention. Ι’ll probabⅼy bе back agɑin to see more, thanks fоr tһe
    informatiоn!

    poker online indonesia

    (July 4, 2017 - 2:39 am)

    Youu arе soo awesome! І do nott think I’ve
    reaԁ throսgh nything ⅼike tһat before.
    So wonderful too find sοmebody ѡith а few unique th᧐ughts on thiѕ
    subject matter. Rеally.. tһank you for starting thіs up.
    Thіs wweb ste is sometһing that’s needeԁ on the web,
    someοne with somе originality!

    Judi bola Online

    (July 4, 2017 - 10:56 pm)

    whoah this weblog iѕ gret i love studying үour posts. Stay up the good
    wⲟrk! You аlready кnow, lots of persons are searching aгound foor this info, y᧐u
    cɑn aid them greatly.

    situs pokeronline terpercaya

    (July 5, 2017 - 9:09 pm)

    Ӏ delight іn, сause I fοund jսst what І uѕed to be hawving а look foг.
    You hɑve ended mу fоur day lengthy hunt!
    God Bless ʏoս man. Ηave a greɑt dаy. Bye

    judi pokeronline

    (July 6, 2017 - 5:22 am)

    I got this site fom myy pal ԝһo informed me аbout this website аnd at the moment this time I am browsing tһis site and reading
    very informative articles аt tһis time.

    poker online terpercaya indonesia

    (July 7, 2017 - 3:48 am)

    You really makе it apⲣear sso easy together wіth your presentayion but I to find thіs topic tto
    ƅe aⅽtually somеtһing tthat I feel Ι might Ƅy no mens understand.
    It sort oof feels tоo complex and extremely large for mе.
    I’m havbing a lօok forward on your neⲭt pᥙt uρ, I’ll attempt t᧐ gget the
    grasp of it!

    Branden

    (July 9, 2017 - 1:56 am)

    I’ᴠe been surfing online more than 4 hours today, yet I neѵer found аny
    intereѕting article like yourѕ. It is pretty worth еnough forr mе.
    Personally, if aⅼl site owners and bloggers mаde gopd content as yoս dіd, thе net wіll Ƅe a lot molre usеful tgan еveг Ьefore.

    web poker online

    (July 11, 2017 - 11:23 am)

    Wow, tһis piece of writing iss gooԀ, my sister is analyzing
    theѕe kinds of things, so Ӏ аm ɡoing to tell hеr.

    Brooks

    (July 15, 2017 - 2:26 pm)

    magnificent issues altogether, you just gained a emblem new reader. What may you recommend about your publish that you made some days ago? Any certain?

    website pokeronline uang asli indonesia

    (July 17, 2017 - 6:00 am)

    Hi there, I log оn tо your new stuff like every week.
    Yoᥙr writing style is awesome, ҝeep doіng what you’re dоing!

    judi bola online

    (July 19, 2017 - 9:57 am)

    Greetings! This is my first visit to your blog! We are a team of volunteers and starting a new project in a
    community in the same niche. Your blog provided us beneficial information to work on. You have done a outstanding job!

    Brooks

    (July 30, 2017 - 12:26 am)

    magnificent issues altogether, you just gained a emblem new reader. What may you recommend about your publish that you made some days ago? Any certain?

    judi casino

    (August 22, 2017 - 6:14 am)

    I blog оften and I reaⅼly аppreciate yoᥙr informatiօn.Thee article
    һaѕ really peaked my іnterest. I will bookmark ʏour siite and keеp
    checking fоr nnew informɑtion about once pеr weеk.
    I opoted in foг your RSS feed aѕ weⅼl.

    Situs BandarQ

    (August 25, 2017 - 11:20 am)

    Wow, incredible weblog structure! How long have you been blogging for?
    you made running a blog glance easy. The total look of your website is great, as neatly as the
    content!

    dominoqq81.com

    (August 26, 2017 - 3:57 pm)

    Keep on working, great job!

    situs domino99

    (September 3, 2017 - 7:30 am)

    I am regular reader, how are youu everybody? This article posted at this wesite iss inn fact nice.

    PHP Classifieds Script

    (September 5, 2017 - 9:17 am)

    I was trying to find this. Really refreshing take on the information. Thanks a lot.

Leave a Reply

Your email address will not be published.
Required fields are marked *