Russell Rhoads

Make smart trading decisions using candlestick charting. This cheat sheet shows you how to read the data that makes up a candlestick chart, figure out how to analyze a candlestick chart, and identify some common candlestick patterns.How to construct a candlestick chartFour pieces of data, gathered through the course of a security’s trading day, are used to create a candlestick chart: opening price, closing price, high, and low.

Four pieces of data, gathered through the course of a security’s trading day, are used to create a candlestick chart: opening price, closing price, high, and low. The candle in a chart is white when the close for a day is higher than the open, and black when the close is lower than the open. The wicks, lines sticking out of either end of the candlestick, represent the range between the day’s high and low prices.

You can become more familiar with some common and dependable candlestick patterns by checking out the following figures. (Remember, they don’t represent every possible candlestick pattern.) Bullish two-day trend reversal patterns These charts are a few of the most common and reliable bullish two-day trend reversal patterns in an uptrend.