Every chart on Momentum IQ uses candlestick charts — the most informative and widely used chart format in the world. Before studying individual candlestick patterns, you must understand what a single candle is telling you. This guide explains everything from scratch.

What is a Candlestick?

A candlestick represents price activity during a specific time period — one day, one hour, 15 minutes, or any other timeframe. Each candle contains exactly four pieces of information:

Bullish Candle Close > Open (Green) High Close Open Low Body Upper wick Lower wick Bearish Candle Close < Open (Red) High Open Close Low Green = buyers won the session | Red = sellers won the session

The Four Price Points — OHLC

Price PointMeaningOn the Candle
Open (O)Price when the session beganBottom of green body / Top of red body
High (H)Highest price reached during the sessionTop of the upper wick
Low (L)Lowest price reached during the sessionBottom of the lower wick
Close (C)Price when the session endedTop of green body / Bottom of red body
On NSE, the daily candle opens at 9:15 AM and closes at 3:30 PM IST. The body shows where price was at open and close. The wicks show the full range that price explored during the day.

Green vs Red — Who Won the Session?

The body colour tells you immediately who won the battle between buyers and sellers:

  • Green candle (bullish) — Close is HIGHER than Open. Buyers were stronger. Price ended above where it started.
  • Red candle (bearish) — Close is LOWER than Open. Sellers were stronger. Price ended below where it started.

What the Body Size Tells You

Large body Strong buyers Medium body Moderate move Small body Indecision Doji Open = Close Perfect indecision Large red body Strong sellers
  • Large body — one side dominated the entire session with conviction
  • Small body — neither side had clear control — indecision
  • No body (Doji) — open and close are identical — complete standoff

What the Wicks Tell You

Wicks (also called shadows or tails) show how far price moved BEYOND the open-to-close range. They reveal price rejection — levels that were tested but not accepted by the market.

Long upper wick Sellers rejected highs Long lower wick Buyers rejected lows Equal wicks Both sides pushed back No wicks Total bull control
  • Long upper wick — buyers pushed price up but sellers rejected it and pushed back down. Bearish sign.
  • Long lower wick — sellers pushed price down but buyers stepped in and rejected it. Bullish sign.
  • No wicks — one side controlled the session completely from open to close (Marubozu)

Reading a Candle — The Full Story

Every candle tells a complete story about the session. Here is how to read a typical daily NSE candle:

Example — HDFC Bank, 3rd March 2024 (hypothetical):
Open: ₹1,480 | High: ₹1,510 | Low: ₹1,465 | Close: ₹1,498

Reading: The session opened at ₹1,480. Buyers pushed price up to ₹1,510 but faced selling pressure and pulled back. Then sellers pushed price down to ₹1,465 but buyers stepped in strongly. By close, buyers had pushed price back to ₹1,498 — above the open. Result: Green candle with a medium body, a moderate upper wick (sellers at the top), and a notable lower wick (buyers defended the lows).
Story: Buyers ultimately won the session but faced resistance at ₹1,510 and tested buying interest at ₹1,465.

Multiple Candles Together — Reading the Flow

Individual candles are informative, but reading multiple candles together reveals the bigger picture:

Uptrend Rising closes — buyers in control Downtrend Falling closes — sellers in control Sideways Alternating — no clear winner

Timeframes — Same Stock, Different Candles

The same stock looks completely different on different timeframes. Each candle represents the OHLC for its specific period:

TimeframeEach Candle = Used for
1-minutePrice activity in 1 minuteScalping
15-minutePrice activity in 15 minutesIntraday trading
1-hourPrice activity in 1 hourShort-swing trading
DailyFull NSE trading session (9:15–3:30 PM)Swing trading (most common)
WeeklyFull trading week (Mon–Fri)Positional / investing

The Three Things Every Candle Shows

Before reading any candlestick pattern, always ask three questions:

1. Who won? — Green = buyers. Red = sellers.
2. By how much? — Large body = decisive win. Small body = close contest.
3. Did price get rejected anywhere? — Long wick = price was pushed back from that level.
Start every chart analysis by zooming out and reading the sequence of candles from left to right. Are the closes generally rising (uptrend)? Falling (downtrend)? Mixed (sideways)? The trend context determines how you interpret individual candles and patterns. A bullish candle means much more in an uptrend than in a downtrend.

Common Beginner Mistakes

  • Focusing on candle colour only — A big green candle with a massive upper wick is NOT a strong bullish signal. Read the full candle.
  • Trading single candles without context — A Hammer is only meaningful after a downtrend at a support level. Context is everything.
  • Ignoring timeframe — A bearish daily candle means nothing if the weekly trend is strongly bullish.
  • Reacting to every candle — Most candles are noise. Wait for significant patterns at significant price levels.