The Beginner Trader
How to read a candlestick chart
Before you can read a full candlestick chart with all those confusing lines and indicators, you need to know what a candlestick is made up of and what each individual candlestick tell us. So let’s start with the basics.
What is a candlestick chart?
A candlestick chart as it relates to a stock, gives us information on the price of a stock on a given month, week, day, hour, minute, or even second. It’s also a quick reference to the past price of a stock, and the chart will allow you to see trends. The time frame you choose to view the chart in (1min, 5min, 1D, 1Mo, etc.) depends on what your trading strategy requires. We will not get into in this post. A chart is made up of multiple candlesticks. The candlesticks can vary in size, shape, and color. Learning how to read a single candlestick is the first step in learning how to read the charts and look for patterns that will fit your future trading strategies.