Candlestick Chart Basics – How to Read a Stock Chart

So what are candlesticks in this video
I’m gonna go over basics of reading candlesticks and how to use them to read
a stock chart hey what’s going on on this channel we talk about stocks and
options with idea allowing you to trade as a full time job or trade well
maintain a full time job so if you’re new here consider subscribing and today
we’re going over candlestick basics candlesticks represent price change over
a certain duration candlesticks can represent anywhere between a minute
worth of data or a month’s worth of data so for a stock you can have a
candlestick represent what happened to the price change of that stock over the
last let’s say 10 minutes there are two types of candlesticks bullish or bearish
bullish meaning that the price increased over that time period and bearish
meaning the price decreased over that time period this candle right here is a
bullish candle and that is represented by the fact that the color of the body
is green this represents that the price increased over the duration that that
candle represents so if this was an hour long candle it would mean that the price
increased over that hour to go over all the different parts of a candle you have
the three parts of it the body and the two wicks the body shows you where the
open and closed were based on the color of the body and the wicks show you where
the high and the low were instead of knowing the closing price of that
timeframe that a normal graph would have candlesticks allow you to see a lot more
insight into what happened over that timeframe instead of just knowing where
it opened and closed you can actually tell here the stock opened up around
this price let’s say 65 and then trade it all the way down to 64
and throughout the timeframe traded all the way as high as the high let’s say 67
and then traded back down a little bit enclosed at the closing price which
let’s just say is 66 and based on that you can tell that the opening price was
lower than the closing price which would make this a bullish candle and then it
also had those high and lows this can give you a lot of insight into the
psychology sentiment or just overall strength or weakness of a current stock
so the other candle being a bearish candle just represents the opposite of a
bullish candle that the price decreased over that time period and as you can see
on this candle everything is the exact same except for the fact that the open
is at the top of the candle body and the close is at the bottom of the body just
to give a quick representation of what could have happened over the time period
of this bearish candle is the price could have opened up here and traded up
to the high and then started to trend it down pretty strong throughout this
candle and then hit the low of the candle and then began to go up a little
bit into the closing price where it would have switched into a new candle
but this is what the price could have looked like throughout this candle now
let’s start putting these together so we can look at reading an actual stock
chart and when you actually look at a stock chart the candlesticks are not all
the same they can have a very small bodies and huge wicks or no wicks and
huge bodies there can be any number type of candles it just depends on what
happened with the price action throughout that candle so on this stock
we can see that the price opened up down here because this is
green candles so it’s a bullish candle and that there’s a tiny little wick at
the bottom here so the price traded a tiny bit down and then throughout the
day it it traded all the way up to this high and then eventually closed here and
candles don’t necessarily close and then the next candle opens at that exact
price the next candle can open actually at whatever price someone wants to buy
it at or sell it at and so let’s say this candle actually opened at this
lower price all the way down here but because in the end it closed all the way
up here it is still a bullish candle making it a green candle and we can see
it had two decent-sized wicks giving it those low and high points and then it
eventually closed up here and this next candle opened up at the exact same price
as the other candle but is actually a bearish candle because the price ended
up closing lower than the opening price and as you can see with this candle
there’s actually no bottom link there’s only a little higher wick where the
price tried to push up and then eventually sold all the way off to this
closing price and then with this last candle the price opened up actually
lower than the closing price of the last candle and this is called it it gapped
lower because you can see that there is this little gap between the closing
price and the opening price of the next candle and we can see this is another
bearish candle because the close was all the way down here at the bottom
indicated by that red body color and again this one had decent sized wicks on
the high and the low side but the candle still ended up closing a lower now to
look at an actual stock chart here we have a daily stock chart of Amazon
and so that means each of these candles represents a whole trading day’s worth
of data and so over these 14 days you can see that Amazon went from down here
from around 1,400 and kind of went through this wave-like pattern and
eventually closed up at 1500 but because the data is represented by
daily candles we can take a deeper dive into what happened with the price over
those 14 days starting down here with this first candle you can see that the
price had a really strong day it opened and then closed almost $40 higher with
pretty small wicks and then the next day it actually gapped all the way up to
this price and closed lower with a huge wick down here and this actually even
though the price closed higher than the previous day this is still forming a
bullish candle right here just because that the price opened higher and then
closed lower throughout the day even though compared to the day before the
price is actually still higher and then this next day the price ended up gapping
lower and opening up at this price here and then closing lower as well making
another bearish candle and then the price ended up open here for the next
day and then trading really high and then closing down here so I’m not going
to go through and analyze each of these candlesticks maybe this is a good place
to pause the video and just really look at each day and what happened and try
and practice just reading the candles so you can understand the overall flow of
the stock chart and then just try and find a platform just on the web
you maybe look up different stock prices and just start looking over stock charts
and get better just at looking at these a good website would be training Viacom
it’s just a free website where you can go on and just type in any stock and it
will come up with the stock chart and you will be able to review and start
getting better at reading stock charts and candlesticks hey thanks for turning
on this video if you want to learn more about candlestick charts and learn some
candlestick patterns make sure to check out this video right here and if you
just want more technical analysis videos make sure to subscribe to the channel if
you have any comments or questions make sure to ask them in the comments below
and I hope to see you in the next video

7 thoughts on “Candlestick Chart Basics – How to Read a Stock Chart”

  1. Don't know what candlestick patterns are? Here are the most profitable candlestick patterns.

  2. as always nice video and learned a lot, hi Riley can you get filled if it only touches the wick and not the body itself,tried to search online but cant find one

  3. Hey Riley, can you do a Q&A video on how long it took you to fully understand the technical analysis and what training you did or how long you studied each day? TIA

  4. Could you make a tutorial on the top bottom approach with an example on swing trading.
    One other video idea is how exactly economy and trade between countries affects the market. Thanks. I hope you have a million subs

  5. Hi I hope you upload videos about swing trading like scanning criteria, time frames and what indicators you are using. Thank you.

Leave a Reply

Your email address will not be published. Required fields are marked *