Price Action
Reading Candlestick Charts in Context
A candle tells you about one period. Context tells you whether it matters.
6 min read · Kanira
Anatomy of a candle
Each candlestick shows four prices for a period: open, high, low and close. The body spans the open and close; the wicks show the high and low. A close above the open is typically drawn as a bullish candle, and below as bearish.
Why context beats patterns
Named patterns — hammers, engulfing candles, dojis — are popular, but on their own they are unreliable. The same candle can mean very different things depending on where it appears.
- Is the market trending, ranging or transitioning?
- Is the candle forming at a meaningful support or resistance zone?
- What does the higher timeframe show?
- Is volume or range unusually large compared to recent candles?
Practise deliberately
Scroll back through historical charts, hide the right side, and write down what you expect next and why. Then reveal the outcome. This simple exercise builds pattern recognition faster than memorising names.