How to read a single candlestick

1. Price and behavior



Candlesticks provide these price levels:

• Open - first price in a specific period of time
• Close - last price in a specific period of time
• High - highest price in a specific period of time
• Low - lowest price in a specific period of time

And these main behavior levels:

• Buy
  The candlestick is white, positive. That means the closing price is higher than the opening price
  
  
• Sell
  The candlestick is black, negative. That means the closing price is lower than the opening price
  

TIP!: You can define any color for positive and for negative candlesticks any way you want. (I use green=positive, red=negative.)



2. Shape info

Shape tells you about the strength of emotions on the stock market.

• Long body candlesticks

A candlestick with a long body means strong buying interest (positive candlestick) or selling interest (negative candlestick)





• Short body candlesticks

A candlestick with a short body means indecision. Buyers and sellers cannot win over each other. The last example below is known as a doji candlestick.







• Hammer candlestick

A candlestick with a short body and a long tail means a possible change in behavior. If you find this kind of candlestick after several days of decline, then it indicates the decline might be over or will pause. The same applies for several positive days.






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