How to Read Candlestick Charts

Each candlestick represents price action over a specific time period (1 minute, 1 hour, 1 day, etc.):

Body — The thick part showing the range between the open and close price. - Green/White body — Close is higher than open (bullish candle). - Red/Black body — Close is lower than open (bearish candle).

Wicks (Shadows) — The thin lines above and below the body showing the highest and lowest prices during the period. - Upper wick — Extends from the body to the high. - Lower wick — Extends from the body to the low.

A candle with a long upper wick suggests sellers pushed back against buyers. A long lower wick indicates buyers defended against sellers.

Single-Candle Patterns: - Doji — Open and close are nearly equal, forming a cross. Signals indecision and potential reversal. - Hammer — Small body at the top with a long lower wick. Bullish reversal signal when found at the bottom of a downtrend. - Shooting Star — Small body at the bottom with a long upper wick. Bearish reversal signal at the top of an uptrend.

Multi-Candle Patterns: - Engulfing — A large candle completely engulfs the previous candle. Bullish engulfing signals reversal to the upside; bearish engulfing to the downside. - Morning/Evening Star — Three-candle reversal pattern. A long candle → small-bodied candle (indecision) → long candle in the opposite direction. - Three White Soldiers/Black Crows — Three consecutive strong candles in the same direction. Signals strong momentum.

Candlestick patterns are most powerful when combined with technical indicators:

• Moving Averages (EMA/SMA) — Smooth out price data to identify trends. Common periods: 20, 50, 200.
• RSI (Relative Strength Index) — Measures momentum on a 0-100 scale. Above 70 = overbought, below 30 = oversold.
• MACD — Shows the relationship between two moving averages. Signal line crossovers indicate potential trend changes.
• Volume — Confirms the strength of price moves. A breakout on high volume is more reliable than one on low volume.

On NexChange, you can enable all these indicators directly on the trading chart using the toolbar buttons.