Price action is the foundation of every trading decision. Each candlestick on a chart is a snapshot of the battle between buyers and sellers — who won, by how much, and how convincingly. Before you can read supply and demand, identify trends, or manage risk, you must learn to read individual candles.
Price Action (PA) illustrates the psychology of all market participants
Candlestick charts show Open, High, Low, and Close — the full story of a session
The body shows who finished in control; the wicks show how hard the other side fought
Large bodies = conviction · Small bodies = indecision · Long wicks = exhaustion
Lesson
The Language of Candlesticks
Every candlestick contains four pieces of information. Master the relationship between the body and wicks and you can decode any chart.
Marubozu — Almost no wicks. One party dominated the entire session. Maximum conviction.
Spinning Top / Doji — Tiny body, equal wicks. Total indecision. Neither party won.
Hammer — Long lower wick, small body at TOP of candle, at the bottom of a downtrend. Seller exhaustion — buyers stepped in hard.
Shooting Star — Long upper wick, small body at BOTTOM of candle, at the top of an uptrend. Buyer exhaustion — sellers stepped in hard.
Dragonfly Doji — Long lower wick, no body. Sellers completely rejected — very bullish signal.
Gravestone Doji — Long upper wick, no body. Buyers completely rejected — very bearish signal.
Inverted Hammer — Long upper wick, small body at BOTTOM of move. Context-dependent; watch next candle.
Context always matters — the same candle shape at the top of a trend vs. the bottom tells completely different stories.
Check Yourself
A downtrend has been in place for 11 sessions. The most recent candle has a very small body and a long lower wick. What does this candlestick signal?
● Seller exhaustion — potential bullish reversal
● Downtrend continuation — sellers still fully in control
● Indecision only — cannot read direction from this alone
Answer it (with a live chart) in the interactive lesson.
Liquidity Theory · Learn · Analyze · Trade together Educational content only — trading involves substantial risk and most beginners lose money. Nothing here is financial advice.