ZAforexHow to read a candlestick
The body shows the range between open and close: green (or white) if the close is higher than the open, red (or black) if lower. The thin wicks (shadows) show the high and low. Long wicks mean price was pushed away from that level, a sign of rejection.
Single-candle patterns
| Pattern | Shape | Meaning |
|---|---|---|
| Doji | Open and close almost equal; cross shape | Indecision. After a strong trend it can warn of a reversal |
| Dragonfly doji | Doji with a long lower wick | Buyers rejected lower prices (bullish at support) |
| Gravestone doji | Doji with a long upper wick | Sellers rejected higher prices (bearish at resistance) |
| Hammer | Small body at the top, long lower wick, after a fall | Possible bullish reversal |
| Shooting star | Small body at the bottom, long upper wick, after a rise | Possible bearish reversal |
| Pin bar | Any candle with a long wick and a small body | Rejection of the wick's direction |
| Marubozu | Big body, no wicks | Strong momentum |
Multi-candle patterns
| Pattern | Meaning |
|---|---|
| Bullish engulfing | A green body fully covers the previous red body: buyers took control |
| Bearish engulfing | A red body fully covers the previous green body |
| Morning star | Three candles (red, small, green) marking a bottom |
| Evening star | Three candles (green, small, red) marking a top |
| Inside bar | A candle within the previous candle's range: consolidation before a breakout |
| Three white soldiers / three black crows | Three strong candles in a row: strong trend |
Doji candlestick meaning in practice
A doji on its own is just a pause. It matters when it appears at a key level (support, resistance, a round number like 18.0000 on USD/ZAR) after an extended move, and is confirmed by the next candle moving in the new direction.
Using candlesticks well
- Use higher timeframes (4h, daily): signals on 1-minute charts are mostly noise.
- Combine with location: a hammer at support is meaningful, a hammer in the middle of nowhere isn't.
- Wait for the candle to close before acting.
Frequently asked questions
What does a doji candle mean?
A doji shows the open and close were nearly the same, which signals indecision between buyers and sellers.
What is the most reliable candlestick pattern?
Engulfing patterns and pin bars at strong support or resistance on higher timeframes are popular, but no pattern is reliable on its own.