How to Read a Candle Stick?

Traders closely observe the candlestick chart formations on the screen to make important trading decisions. Candlesticks are used to observe the open, low, high, close of a stock.

A Candlestick comprises of three parts

  1. Real Body
  2. Upper Shadow
  3. Lower Shadow
Candlestick Anatomy

A candlestick indicates bullishness or bearishness of a stock. Based on that few names were given like Marubozu, Doji, Spinning Tops, Hammer, Hanging man, Shooting star. But I am not a fan of these names and I hate remembering such names. So I will try to explain this topic in a lucid manner in my further articles.

In the above picture of Candlestick anatomy, you can observe upper shadow, real body and lower shadow.
In the below figure I indicated the terms Open, Low, High, Close.

The upper shadow indicates more buyers at that price and the lower one indicates sellers. The real body indicates who succeded whether the buyers or sellers. Let me make it more clear with the following video.



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