How to Read Candlestick Charts: Essentials for Beginners

CryptoRebateHub Editorial Team

The four prices in one candle, what red/green means, and a few of the most basic patterns

Candlestick charts are the foundational tool for reading price action. Understand them and you can read the chart.

One candle contains four prices

  • Open and close: form the candle's "body" (the thick part).
  • High and low: form the upper/lower "wicks" (the thin lines).

Bullish vs bearish candles

  • Bullish (usually green/white): close above open — price rose this period.
  • Bearish (usually red/black): close below open — price fell this period.
  • The longer the body, the stronger the bull/bear force.

What wicks tell you

  • Long upper wick: a rally hit strong resistance and got pushed back — possible top signal.
  • Long lower wick: a drop got strongly bought back — possible bottom signal.

A few basic patterns

  1. Doji: open and close nearly equal — bulls and bears deadlocked, often before a turn.
  2. Hammer: long lower wick + small body — a potential reversal signal at the end of a decline.
  3. Engulfing: a large bullish candle fully engulfs the prior bearish one (bullish engulfing) — a stronger reversal signal.

Beginner reminders

  • A single candle means little — read it with the trend and location.
  • Larger timeframes (weekly > daily > 1h) give more reliable signals.
  • Candles are probability tools, not crystal balls — combine with volume and indicators.

For reference only. Not financial advice.

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