How do candles work?
Anatomy of a candle
ℹ
Understanding Candlestick Charts
Candlestick charts are the foundation of technical analysis. They compress price action into a visual language that reveals market sentiment, trader psychology, and potential turning points. This lesson breaks down how to read the anatomy of a candle and what each component tells you about the market.
What you'll learn here
Candlestick charts have remained the dominant form of price visualization for centuries because they encode market information efficiently. Understanding what each part means transforms raw price data into actionable insights.
- How to read the four price points in each candle
- What the body and wicks reveal about market sentiment
- How to interpret color coding and visual structure
- Why candle patterns matter for trading decisions