Lesson 9 of 31 · Zero to reading a chart

How to Read a Candlestick: The Candle Is a Fight

Every candle is the same tug of war: the body (open to close) says who won the window, and the wick is the part that was reached and not held - so nobody has to memorise candle shapes.

Look at this candle. It has a fat part and a thin part. Which one tells you who won?

Most people think you have to memorise candle shapes. Dozens of them, each with a name.

You don't. Every candle is the same fight. You can read who won from two things.

Last time: a candle is four numbers. The open, the high, the low, the close.

Today we turn those four numbers into a story.

Think of a tug of war. One team pulls the price up. The other pulls it down.

The window opens, and the rope starts in the middle. For a while the up team drags it high.

Then the down team drags it back. When the window closes, the rope stops wherever it is.

Now look at the candle again. The fat part runs from the open to the close.

That is where the rope started and where it ended. That is the body.

The thin parts reach up to the high and down to the low. That is how far each team pulled before they were pulled back. Those are the wicks.

So the body tells you who won the window. The wick tells you what they could not hold.

You will also hear the body called the real body. And a wick called a shadow, or a tail. Same parts, other names.

Here are three real candles from one real day.

Look at the bodies. Nearly the same size.

Now look at the wicks. This one has almost none. This one has a long wick above. This one has a long wick below.

Three different fights. Nearly the same body.

Read the first one. The body is the whole candle. Nobody pulled the other way. Nothing got pushed back.

Now the second. Same body, but the price went much higher, and lost it. Pushed all the way back before the window closed.

Same body. Not the same story.

The body is open to close: who won. The wick is the part that was reached and not held.

Here is the mistake. Somebody learns twenty candle names and a rule for each one. Then a real candle turns up that fits none of them.

Reading the fight works on every candle ever drawn. Every candle is one.

And notice what who won means. It means who won that window. Not the day.

Not the next window. The next candle starts a new pull.

Find a candle with a long wick. Say out loud who was pushed back.

Check yourself

What is the body?

Open to close. Who won the window.

What is the wick?

The part that was reached and not held.

Big body, no wick. What happened?

One side pulled the whole way. Nothing was pushed back.

Next lesson: Green does not mean up.

For learning only. Not financial advice, not signals, not stock picks.