If you’re new to trading like me, have a small amount of capital, and want to trade, you need to understand one of the most important trading tools: Japanese candlesticks.
What is a single candle made up of?
The body (BODY)
Each candle represents a period of time, depending on the timeframe you choose—it could be an hour, a day, or more. The candle’s body is the distance between the opening and closing prices for the selected timeframe. The larger the body, the stronger the momentum.
Upper wick (UPPER WICK)
It’s the line above the body, marking the high—the highest price the candle reached.
Lower wick (LOWER WICK)
It’s the line below the body, marking the low—the lowest price the candle reached.
Types of candles:
A bullish green candle
It means buyers are in control: buying pressure.
A bearish red candle:
It means sellers are in control: selling pressure.
Wick secrets—the most important point!
A long wick is a message from the market:
👉 A long lower wick at the bottom = rejection of the low price = a possible bullish signal
👉 A long upper wick at the top = rejection of the high price = a possible bearish signal
👉 A candle with no wicks = strong momentum in one direction
4. How I use them as a beginner with capital
1. Don’t enter in the middle of a large candle. Wait for a small confirmation candle afterward.
2. Always place your stop-loss below the strong candle’s lower wick, not below its body.
3. Start by learning on the H1 and M15 timeframes only.
In summary: A candle tells the story of a battle between buyers and sellers. The body shows who won the battle, and the wick shows where the price was rejected.---
Is the explanation clear? Which candle confuses you the most? Let me know in the comments 👇