Reading Candlestick Charts: Basic Knowledge for Traders

You must be familiar with candlestick charts, which are often used by investors and traders for technical analysis of stocks. For those who are still confused about how to read it, let's find out what each part of the candlestick means.

Candlesticks are one of the most common charts for depicting stock price movement patterns. It looks like a candle of varying sizes and has wicks at the top and bottom.

Green candles indicate a bullish trend where the last price or closing price is higher than the opening price. On the other hand, red candles indicate a bearish trend where the last price or closing price is lower than the opening price.

Candlestick's Parts

The longer the candle body, the greater the price change (fluctuation).

Doji & Marubozu

There are unique candlestick shapes called doji and marubozu.

Doji is a candlestick that has no body so it is just a straight line. This means that the opening price is the same as the closing price (no price change) or the price change is very small.

Meanwhile, the marubozu is a candlestick that has no wicks. In a bullish marubozu, the opening price equals the lowest price and the closing price equals the highest price. While in a bearish marubozu, the opening price equals the highest price and the closing price equals the lowest price.

Already understand how to read candlesticks? Hurry up and download the Neo BOFIS app on the Play Store or App Store and monitor the price movements of your target stocks!

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Disclaimer: The content is made for educational purposes, not a recommendation to buy or sell a particular stock. PT KAF Sekuritas Indonesia is licensed and supervised by the Financial Services Authority (OJK).