How to Read a Candlestick Chart
Understand what each candle shape means and how to spot common patterns like doji, hammer, and engulfing.
What is a candlestick?
A candlestick shows four pieces of price information for one time period (a day, hour, or minute): Open, High, Low, and Close.
- Green (or white) candle — price closed higher than it opened. Buyers won that period.
- Red (or black) candle — price closed lower than it opened. Sellers won.
- Body — the wide rectangle between open and close.
- Wick (shadow) — the thin lines above and below the body showing the high and low.
Common patterns
- Doji — open and close are almost equal. Body is tiny. Signals indecision — neither buyers nor sellers dominated.
- Hammer — small body at the top, long lower wick. Price fell sharply but recovered. Often appears at market bottoms.
- Shooting star — small body at the bottom, long upper wick. Price spiked high but reversed. Often appears at market tops.
- Bullish engulfing — a large green candle completely "engulfs" the prior red candle. Strong reversal signal.
- Bearish engulfing — a large red candle engulfs the prior green candle. Potential top signal.
How TradeMind AI uses candlestick data
The dashboard chart defaults to daily candlesticks. You can switch to 1-hour candles for intraday view. The AI signal analysis considers recent candlestick structure — for example, a long lower wick near a support level adds conviction to a BULLISH signal.
One candle is not a signal
No single candle shape guarantees a move. Patterns are probabilistic, not predictive. They are most useful when they appear at key price levels (support or resistance) and align with indicator signals like RSI or MACD.
See it in action
Every TradeMind AI signal shows confidence score, entry, stop, target, and R-multiple — all explained with tooltip hints when you hover the term.