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| Stock Market | Day 3 |
Every chart you see in trading is made of candles.
Candles tell:
Who is stronger → Buyers or Sellers
Fear or confidence
Momentum
Reversal signals
If you understand candlesticks properly, charts start “speaking”.
1. What is a Candlestick?
A candle shows price movement during a time period.
Example:
1-minute candle
5-minute candle
Daily candle
Each candle has 4 values:
OHLC
Open
High
Low
Close
Example:
Open = ₹100
High = ₹110
Low = ₹95
Close = ₹108
Structure of a Candle
Bullish Candle (Green)
Price closed above the opening price.
Buyers strong.
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Example:
Open = ₹100
Close = ₹110
Profit for buyers.
Bearish Candle (Red)
Price closed BELOW opening price.
Sellers strong.
Example:
Open = ₹110
Close = ₹100
Candle Parts
Body
Middle thick part.
Shows:
Opening and closing price.
Large body = strong momentum.
Wick / Shadow
Thin upper/lower lines.
Shows rejection areas.
Long upper wick:
Buyers pushed up
Sellers pushed down
Long lower wick:
Sellers pushed down
Buyers recovered
2. Timeframe Meaning
The same stock can look different in different time frames.
5-Min Chart
Used for intraday.
15-Min Chart
Cleaner intraday trend.
Daily Chart
Best for beginners & swing trading.
3. Most Important Candlestick Types
A. Doji
Open ≈ Close
Market confusion.
Neither buyers nor sellers are strong.
Possible reversal signal.
B. Hammer 🔨
Small body + long lower wick.
Appears after fall.
Meaning:
Buyers absorbed selling pressure.
Possible bullish reversal.
C. Shooting Star ⭐
Small body + long upper wick.
Appears after rise.
Meaning:
Sellers entered strongly.
Possible bearish reversal.
D. Bullish Engulfing
The big green candle covers the previous red candle.
Meaning:
Buyers are becoming dominant.
Strong bullish sign.
E. Bearish Engulfing
The big red candle covers the previous green candle.
Meaning:
Sellers are gaining control.
4. Important Truth
One candle alone is NOT enough.
Always combine with:
Trend
Support/Resistance
Volume
Market direction
Professional traders use context.
5. Psychology Behind Candles
This is what separates professionals from beginners.
Example:
Long red candle → fear
Long green candle → confidence
Doji → indecision
Candles reflect human emotions:
Fear
Greed
Panic
Optimism
Market = psychology displayed on charts.
6. Beginner Strategy (Very Important)
Start with:
Daily timeframe
Large-cap stocks
Simple support/resistance
Basic candlestick confirmation
Avoid:
Fast scalping
Options buying
Random indicators
Practice Exercise
Open any stock chart like:
Reliance Industries
Infosys
HDFC Bank
Try identifying:
Green candles
Red candles
Hammer
Doji
Golden Rule
Price action first. Indicators later.
Most beginners jump directly to RSI/MACD.
But professional traders first understand:
Candles
Trend
Support/Resistance
Volume
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