What a Candlestick Actually Tells You (and What It Doesn't)
A candle is a four-number summary of a battle that already happened. Reading it well means knowing exactly where its information stops.
Candlestick charts attract mythology like few other tools. Patterns get exotic names and near-magical reputations. Underneath every one of them sits something mundane: four numbers — open, high, low, close — describing a period of trading that is already over.
The information that is really there
The body shows where the period opened and closed — who finished in control. The wicks show the extremes — how far each side pushed before being rejected. A long lower wick genuinely does tell you sellers drove price down and buyers reclaimed it before the close. That's real information about what happened.
The information that is not
What a candle cannot tell you is what happens next. A hammer at support is not a promise; it's a data point. The same shape appears before reversals and before continuations, and no amount of pattern vocabulary changes that. Context — where the candle forms, what came before it, what the market is doing at larger scales — is what gives a shape any meaning at all.
Key takeaway
Candles summarize the past precisely and predict the future not at all. Read them for who won the period — and let context, not the shape alone, drive any conclusion.
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The free preview module covers these foundations with interactive charts and quizzes.
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