Candlesticks turn four prices — open, high, low and close — into a single shape that captures the mood of a market in one period. Learn the handful of patterns that actually matter.
First time with charts? Start with how to read stock charts, then come back to decode the candles.
Each candlestick is built from four prices in one time period. The thick part is the body, running between the open and the close. The thin lines above and below are the wicks (or shadows), marking the high and low. A green candle closes above its open (buyers won the period); a red candle closes below (sellers won).
A doji has almost no body: the open and close are nearly equal, leaving a cross or plus shape. It signals a standoff between buyers and sellers and often appears right before a trend pauses or reverses.
A hammer has a small body near the top and a long lower wick. It says sellers pushed price down hard, but buyers fought all the way back by the close — a hint that a downtrend may be exhausting.
The shooting star is the hammer's mirror image: a small body near the bottom with a long upper wick. Buyers rallied price up, but sellers slammed it back — a warning that an uptrend may be stalling.
A bullish engulfing pattern is a big green candle whose body completely swallows the prior red one, flipping momentum up. A bearish engulfing is the opposite — a big red candle engulfing a prior green one, flipping momentum down.
| Pattern | What it whispers |
|---|---|
| Doji | Indecision — trend may pause or turn. |
| Hammer | Buyers defended a low — possible bottom. |
| Shooting star | Sellers rejected a high — possible top. |
| Bullish engulfing | Momentum flips upward. |
| Bearish engulfing | Momentum flips downward. |
Use patterns as clues, not commands. No single candle predicts the future, and our charts are simulated for safe practice. For real-market education see investor.gov.
Spot these shapes live in the up/down prediction game, then act on your read in the stock market simulator.
The doji is the simplest to spot — it has almost no body because the open and close are nearly equal, signalling indecision in the market.
A hammer has a small body and a long lower wick, showing that sellers pushed the price down but buyers recovered it by the close — often a sign that a downtrend may be ending.
They are useful clues about momentum and sentiment, not guarantees. They work best when confirmed by the wider trend, volume and support or resistance levels.
It is a large green candle whose body completely covers the previous red candle, suggesting buyers have taken control and momentum is shifting upward.