Bullish & Bearish Candles

What a candle actually measures

A candlestick represents the price action of a single time period. That period is set by your chart's timeframe: a 1-minute candle covers 60 seconds, a daily candle covers 24 hours, a weekly candle covers seven days. No matter the timeframe, every candle encodes exactly four numbers, known as the OHLC values: the Open (price at the start of the period), the High (the highest price traded during the period), the Low (the lowest price traded), and the Close (price at the end of the period).

Those four prices are drawn as two distinct parts. The thick rectangle in the middle is the body, and it spans the distance between the open and the close. The thin lines extending above and below the body are the wicks (also called shadows or tails); they reach up to the high and down to the low. The body tells you where price started and finished; the wicks tell you how far price travelled and got rejected along the way.

This is the crucial mental model: a candle is not a single price, it is a range with a direction. When you see a BTC daily candle that opened at 62,000 and closed at 64,500, that single bar quietly contains thousands of individual trades, order-book sweeps, liquidations and limit fills, all summarised into four numbers and one rectangle. Mastering candles means learning to decompress that story back out.

Bullish vs bearish: who won the period

The single most important thing a candle tells you is who won the tug-of-war during that period. A bullish candle closes higher than it opened: price ended the period above where it started, so buyers (the bulls) were in control by the closing bell. A bearish candle closes lower than it opened: sellers (the bears) pushed price down below the open and held it there. By near-universal convention, bullish candles are drawn green (or hollow/white on older charts) and bearish candles are drawn red (or filled/black).

Notice what defines the colour: it is the relationship between open and close, nothing else. A candle can be deeply red even while finishing higher than the previous candle's close, because colour is set within the period, not relative to the candle before it. This trips up beginners constantly. On TradingView the default ETH chart will paint a candle green only when its own close exceeds its own open.

Here is the part most newcomers miss: the size of the body matters as much as the colour. A large green body means buyers dominated decisively from open to close. A tiny body means the period ended roughly where it began regardless of how much it moved in between, which signals indecision. So you read two layers at once: colour for direction, body size for conviction.

Reading the wicks: where the real fight happens

If the body tells you who won, the wicks tell you how hard the fight was and where price got rejected. A wick forms when price pushes in one direction during the period but is then forced back before the close. Imagine an ETH 1-hour candle that opens at 3,400, spikes to 3,480, but gets sold back down to close at 3,410. That spike to 3,480 leaves a long upper wick: buyers tried to push higher, sellers slammed them back. The wick is the footprint of rejected price.

This is why wicks are so valuable around key levels. A long lower wick at a support zone tells you buyers stepped in aggressively and defended that price; a long upper wick at resistance tells you sellers defended their ceiling. Two candles can both be green, but the one with a long lower wick and small body carries a very different message from a clean tall body with no wicks.

• Long upper wick = price was pushed up then rejected (selling pressure at the top).
• Long lower wick = price was pushed down then bought back up (buying pressure at the bottom).
• Wicks on both ends = volatility and indecision; neither side held the extreme.
• No wicks at all (a marubozu) = total control by one side for the whole period.

A trader treats wicks as evidence of intent. If BTC sweeps below an obvious support at 60,000 down to 59,400 and then closes back at 60,800, that long lower wick is often a liquidity grab: stops below support were hunted and triggered, then price reclaimed the level. Reading that wick correctly can be the difference between panic-selling the breakdown and buying the reclaim.

Named single candles every trader memorises

Once you can read body and wicks, individual candles take on recognisable shapes with names and meanings. These are single-candle patterns, the foundation of all candlestick analysis. Get the geometry exactly right, because a hammer and a shooting star are mirror images and confusing them is a classic beginner error.

A hammer has a small body sitting at the TOP of the range with a long lower wick at least twice the body length and little or no upper wick. It forms after a decline and signals that sellers drove price down hard but buyers reclaimed nearly all of it by the close. A shooting star is the inverse: a small body at the BOTTOM of the range with a long upper wick, appearing after a rally, warning that buyers pushed up but sellers rejected the high.

A doji is a candle where the open and close are virtually equal, leaving an almost invisible body that looks like a cross or plus sign. It represents pure indecision: whatever happened during the period, the market ended exactly where it started. A doji after a strong trend is a yellow flag that momentum may be stalling. A marubozu, by contrast, has a full body with no wicks on either end: price opened at one extreme, closed at the other, and never looked back. A green marubozu is maximum bullish conviction.

A SUCCESS example: a hammer that worked on SOL

Let us walk through a textbook bullish setup. SOL has been selling off for several days and approaches a well-tested support zone near 138. On the daily chart a candle opens at 142, plunges to 131 intraday as a cascade of long liquidations hit, but buyers step in violently and drag price back to close at 141. The result is a hammer: small body at the top near 141, a long lower wick down to 131, almost no upper wick. The long wick prints exactly on the 138 support, showing buyers defended the level and rejected the breakdown.

The next day confirms the signal: a bullish candle opens at 141 and closes at 149, taking out the prior candle's body. Now the hammer has confirmation. A trader who waited for that confirming close enters with a clear story: support held, sellers were absorbed, momentum flipped. Over the following sessions SOL grinds back toward the 162 resistance, rewarding the patient entry.

Why did this work? Three things lined up. First, location: the hammer formed at established support, not in the middle of nowhere. Second, the wick: a long lower wick into a liquidation flush is the signature of forced sellers being absorbed by stronger hands. Third, confirmation: the trader did not buy the hammer's close blindly; they waited for the following candle to validate the reversal. Alignment of location, wick evidence and confirmation is what separates a high-probability candle read from a hopeful guess.

A FAILURE example: the trap that catches beginners

Now the cautionary tale, because candles fail constantly and a good trader plans for it. ETH is in a steady downtrend. A trader spots what looks like a bullish hammer near 3,200 and buys immediately on the close, convinced the bottom is in. But look closer: there was no established support at 3,200, the broader trend was firmly down, and crucially the very next candle opened at 3,190 and closed at 3,080 as a large red marubozu. The 'reversal' was nothing of the sort; price continued straight down to 2,950.

What went wrong was not the candle, it was the reading. The hammer shape was real, but the context was absent: no support level beneath it, a dominant downtrend pushing against the trade, and an entry taken before any confirming candle. The trader bought a single green-looking shape and ignored everything around it. The good news is that a defined stop above the recent high kept the loss small. The lesson: candles produce false signals all the time, so your edge comes from context plus risk control, never from any single bar.

A worked trade: reading candles into entry, stop and target

Let us turn a candle read into a complete, risk-defined trade on BTC. Setup: BTC has pulled back into a higher-timeframe support and a bullish order block around 60,500 after a strong uptrend. On the 4-hour chart we get a bullish engulfing read: a small red candle followed by a large green candle whose body completely engulfs it, closing at 61,800 with a long lower wick that swept the 60,200 lows and reclaimed them. That long lower wick is our evidence that sellers were trapped.

1. 1Identify the level: the bullish order block / support zone sits at 60,200 to 60,800.
2. 2Read the candle: a bullish engulfing with a long lower wick that swept liquidity below 60,500 and closed strong at 61,800 confirms buyers defended the zone.
3. 3Set the Entry: 61,800 on the close of the engulfing candle (or a limit retest into 61,000).
4. 4Set the Stop: 59,900, just below the wick low and the order block, so if price closes back inside the zone the idea is invalidated.
5. 5Set the Target: 67,000 at the prior swing high / resistance, giving roughly a 1:2.7 risk-to-reward on the close entry.

The reasoning ties everything together. The candle (a bullish engulfing with a liquidity-sweeping lower wick) is the trigger. The order block gives the location. The stop is placed where the read would be proven wrong, not at an arbitrary dollar amount, which is the correct way to use a candle for risk: the wick low defines invalidation. The target sits at the next structural resistance. Position size is then calculated so that the distance from 61,800 to 59,900 risks only a fixed fraction of the account, typically one percent. Notice you never needed to predict the future, you simply read what the candles told you and let the structure define every level.

How a trader actually uses candles day to day

In live trading, candles are not used to make standalone predictions; they are used to confirm or reject ideas you already have from structure. A practical workflow looks like this: first you mark your higher-timeframe levels (support, resistance, order blocks) on the daily and 4-hour charts. Then you wait for price to reach one of those levels. Only then do you zoom in and watch how the candles behave at the level, because that behaviour tells you whether the level will hold.

At support you want to see buyer footprints: hammers, long lower wicks, bullish engulfing candles, a green marubozu. At resistance you want seller footprints: shooting stars, long upper wicks, bearish engulfing candles, dojis signalling stalling momentum. The candles confirm whether the level is doing its job. Combine this with volume (a reversal candle on high volume is far more reliable) and with the higher-timeframe trend, and you have a repeatable, evidence-based process rather than gut feeling.

• Always note the timeframe: a hammer on the daily carries far more weight than one on the 1-minute.
• Trade with the higher-timeframe trend unless you have strong exhaustion evidence against it.
• Use wicks at levels as your primary clue for who is defending price.
• Demand confirmation from the next candle before committing risk.
• Let the candle's wick define your stop, not a round number.