Candlesticks are a way to read price action in financial markets.
Components of a candle:
Body: the difference between open and close.
Upper wick: highest price.
Lower wick: lowest price.
Types:
Bullish candle: close above open → buyer strength.
Bearish candle: close below open → seller strength.
Famous patterns:
Hammer: potential start of an uptrend.
Doji: indecision and potential trend reversal.
Bullish/Bearish engulfing: strong reversal signal.
Benefits:
Understanding market direction.
Identifying entry and exit points.
Predicting potential reversals.
Best used with:
Support and resistance.
Technical indicators.
Capital management.