How to read a candlestick chart step by step?

Identify trend, spot key patterns (hammer, doji, engulfing), confirm with volume, align with timeframe, and check support/resistance before taking trades.

How are candlestick charts used for intraday trading?

Use 5- or 15-minute candles, combine with volume, and act near key levels; avoid trading against the dominant intraday trend.

Where can I practice reading candlestick charts?

Practice on platforms like TradingView and the NSE/BSE websites using live and historical data to backtest your reading.

How to Read a Candlestick Chart. - The Finxperts Academy

Q: What is a candlestick chart?

A candlestick chart is a financial chart showing open, high, low, and close (OHLC) for a period, helping traders see bullish or bearish momentum.

Q: What are bullish candlestick patterns?

Hammer, bullish engulfing, and morning star are common bullish patterns that suggest potential upward reversals.

Q: What are bearish candlestick patterns?

Shooting star, bearish engulfing, and evening star indicate potential downward reversals.

Q: What is a Doji candlestick?

A doji forms when open and close are nearly equal, signaling market indecision and a possible trend change.

Q: Who invented candlestick charts?

They originated with Japanese rice traders and were popularized in modern markets by Steve Nison.

Q: Are candlestick patterns reliable?

Yes—when combined with volume, trend, and support/resistance. No single pattern should be used in isolation.

Q: What’s the difference between candlestick and bar charts?

Candlesticks are more visual, using colored bodies and wicks; bar charts use lines and are less intuitive for many beginners.

How to Read a Candlestick Chart | 2025 Complete Guide

How to read a candlestick chart is the first step for anyone learning technical analysis. Candlestick charts show market psychology in real time, revealing when buyers or sellers are in control. In this 2025 guide, The Finxperts Academy explains candlestick basics, bullish/bearish patterns, and how to apply them in stock trading.

What is a Candlestick Chart?

Candlestick charts are the most popular way to visualize stock price movements. Originating in Japan during rice trading, they now dominate global stock market analysis.

Each candlestick shows:

Open price at session start.
High price during the session.
Low price during the session.
Close price at session end.

👉 On BSE India and NSE India, green candles usually indicate gains while red candles signal losses.

Structure of a Candlestick

When learning how to read a candlestick chart, focus on these components:

Body: Represents the distance between open and close.
Wicks (Shadows): Lines showing highs and lows.
Color: Green (bullish), Red (bearish).

This simple structure reflects market emotions — greed, fear, confidence, or doubt.

Basic Signals from Candlesticks

Bullish Candle (Green): Buyers are dominating.
Bearish Candle (Red): Sellers are in control.
Doji: Open and close are nearly equal — a sign of indecision.
Long Wick: Shows rejection of a price level, often a reversal clue.

Key Candlestick Patterns Every Beginner Must Learn

Hammer: Appears at the bottom of a downtrend → signals bullish reversal.
Shooting Star: Appears at the top → bearish reversal.
Doji: A sign of hesitation before major moves.
Engulfing Pattern: Strong reversal when one candle covers the previous one.
Morning Star & Evening Star: Multi-candle patterns showing trend changes.

👉 According to Investopedia, these five patterns are must-know for traders.

How to Read a Candlestick Chart in 5 Steps

Check the Trend: Are candles rising or falling overall?
Identify Patterns: Spot bullish or bearish signals.
Confirm with Volume: A strong move should have high volume.
Match Timeframes: Daily for long-term, 5-min for intraday.
Use Support/Resistance: Patterns near key levels are stronger.

Example: If Infosys forms a bullish engulfing candle at NSE support, traders often expect an upside bounce.

Common Mistakes While Reading Candlesticks

Trading on a single candle without context.
Ignoring volume confirmation.
Not considering the bigger market trend.
Expecting patterns to work 100% of the time.

That’s why structured mentorship is essential for mastering candlestick analysis.

Why Learn Candlestick Reading with The Finxperts Academy?

At The Finxperts Academy, we simplify candlestick learning through:

Step-by-step workshops for beginners.
Live chart reading sessions on NSE/BSE data.
Integration with strategies like options hedging and arbitrage.
Practical simulations so learners apply theories immediately.
Career-focused programs aligned with NISM standards.

👉 Our stock market training in Noida blends theory with live practice.

Example: Candlestick Use in Intraday Trading

A Delhi NCR student noticed a doji candle forming on Reliance’s intraday chart. With mentor guidance, he avoided entering early. When the next candle broke support, he placed a short trade — saving losses and earning ₹5,000 profit in a single day.

FAQs

Q1: What is a candlestick chart?
A: A price chart that shows open, high, low, and close prices in candle form.

Q2: How to read a candlestick chart?
A: Identify trend, patterns, confirm with volume, check timeframe, and align with support/resistance.

Q3: What are bullish candlestick patterns?
A: Hammer, bullish engulfing, morning star are strong bullish setups.

Q4: What are bearish candlestick patterns?
A: Shooting star, bearish engulfing, evening star indicate reversals.

Q5: What is a doji candlestick?
A: A candle where open and close are nearly equal, showing indecision.

Q6: Who invented candlestick charts?
A: Japanese rice traders, popularized by Steve Nison globally.

Q7: How to use candlestick charts for intraday trading?
A: Use 5-min/15-min candles with volume confirmation.

Q8: Are candlestick patterns reliable?
A: Yes, especially when combined with broader analysis.

Q9: Where can I practice candlestick chart reading?
A: TradingView, NSE/BSE live charts.

Q10: What is the difference between candlestick and bar chart?
A: Candlestick charts are more visual and emotion-driven than bar charts.

Institute Info

The Finxperts Academy
B-11, Sector 2, Noida – 201301
Website: www.thefinxpertsacademy.com
Email: thefinxpertsacademy@gmail.com
Phone: +91 9717333285

Disclaimer

This blog is for educational purposes only. Stock market investments are subject to risks. Please do thorough research before investing.