In 18th-century Japan, rice merchants developed a method of recording price movements that looked like candles. Three centuries later, those same candles are used by every serious trader on the planet, on every financial market, to decode the real story of supply and demand behind every price move. Master candlesticks and you can read any market in the world.
A candlestick represents price action over a specific time period — showing open, high, low, and close (OHLC) in a single visual unit. The body shows the open-to-close range. The wicks (shadows) show the extreme highs and lows reached during that period.
Anatomy of a candlestick
Bullish candle (green): Close HIGHER than open.
- Body stretches from open (bottom) to close (top)
- Upper wick = highest price reached
- Lower wick = lowest price reached
Bearish candle (red): Close LOWER than open.
- Body stretches from open (top) to close (bottom)
What the body and wicks tell you
Long body = Strong conviction. Buyers or sellers dominated the entire session.
Short body = Indecision. Balanced battle between buyers and sellers.
Long upper wick = Buyers pushed price high but sellers rejected the move by close. Bearish pressure.
Long lower wick = Sellers pushed price down but buyers stepped in strongly. Bullish pressure.
Doji = Open and close nearly identical. Maximum indecision. Signals potential reversal when appearing at key levels.
Reading a candle's story:
EUR/USD has been rising 3 hours. A candle appears with a small green body and a long upper wick (price reached 40 pips above open but closed near open).
What this tells you: buyers tried to push higher, sellers rejected the move aggressively. Close was almost unchanged despite the push. This is a warning that the uptrend may be exhausting — experienced traders tighten stops or prepare to exit.
NGX parallel: Read any MTNN daily chart. On high-volume earnings days you see large-bodied candles — pure directional conviction. On pre-results uncertainty days you see dojis and small bodies — the market genuinely does not know which way to go. The candles communicate the crowd's emotion in real time, regardless of which market you are watching.
Reading candles in isolation and treating them as guaranteed signals. A hammer (long lower wick, small body) at a random chart location means little. The same hammer at a major support level after a sustained downtrend is a high-probability reversal signal. Context is everything — location plus candle pattern, never candle alone.
Practice "candle by candle" analysis: cover all but the last 3 candles on your chart. Based on those 3, predict what the next one will look like — then reveal it. This builds pattern intuition faster than studying static diagrams ever will.
Every candlestick tells the story of the battle between buyers and sellers — the body shows who won, the wicks show how hard both sides fought, and the context determines whether that story matters.
