How to Read Candlestick Charts: A Beginner's Guide

Learn how to read candlestick charts from scratch — what the body, wicks and colours mean, and the key patterns every South African trader should recognise.

Candlestick charts are the default way traders visualise price, and learning to read them is one of the highest-value early skills. Each candle packs four pieces of information into a single shape — once you can read it at a glance, charts stop looking like noise.

What a single candle tells you

Every candle covers a fixed time period (one minute, one hour, one day). The thick part is the 'body', which spans the open and close prices. The thin lines above and below — the 'wicks' or 'shadows' — show the highest and lowest prices reached during that period.

A green (or hollow) candle means the price closed higher than it opened
A red (or filled) candle means the price closed lower than it opened
A long body shows strong conviction; a small body shows indecision
Long wicks show prices were rejected — buyers or sellers pushed back

Three patterns worth knowing

You do not need to memorise dozens of patterns. A few reliable ones do most of the work: the 'doji' (tiny body, signalling indecision), the 'hammer' (long lower wick, hinting at a bounce), and the 'engulfing' pattern (a large candle that swallows the previous one, suggesting a shift in momentum).

Context beats patterns

A pattern in isolation means little. Always read candles alongside volume, the wider trend, and the news. A hammer at a major support level after heavy selling is far more meaningful than the same shape in the middle of a quiet range.

Practise reading charts risk-free

The fastest way to internalise candlesticks is to watch them form live and predict the next move — without money on the line. A simulation account is built exactly for this kind of low-stakes repetition.

Next: how stop-loss orders protect your trades

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