Boot Camp Day 2: How Do You Read Candlestick Bodies, Wicks, and Dojis?

TL;DR

Read a candlestick by using its body to identify the open and close and its wicks to see the highest and lowest prices reached during that period. On a 5-minute chart, each candle represents 5 minutes of price action; long wicks can reveal rejection or weakening momentum, while dojis indicate indecision. Read on to understand why these signals should remain only one confluence in a trade decision.

Transcript

welcome to day two um day one clearly was not too difficult you just had to sit there and watch me cry like a little [ __ ] um but here we are day two we're actually looking at charts um but you probably won't learn much again because this is going to be a video from scratch but you will gain or sorry this is going to be a course from scratch um bu... Read More

Key Insights

• A candlestick represents the full price action of one time period. On a 5-minute chart, a single candle captures everything price did during those 5 minutes, letting you read the whole move from one shape.
• The body of a candle shows the open and the close. On a green (bullish) candle price opens at the bottom of the body and closes at the top; on a red (bearish) candle the open is at the top and the close is at the bottom.
• Wicks show where price traveled but did not close. The upper wick marks the highest point price reached and the lower wick marks the lowest, even though the candle failed to close there.
• The time frame determines what one candle means. The chart offers many time frames (1, 2, 3, 5 minutes and up), and the selected time frame is exactly how long it takes each candle to close.
• A long upper wick with a close below it signals weak bulls. It shows buyers pushed price up but were not strong enough to close above the levels above, often after taking liquidity, revealing hidden weakness.
• Multi-candle patterns like head and shoulders, W's, and mountain tops are considered unreliable BS. Only single-candle patterns are trusted because they directly show price action and rejection.
• Dojis are small-bodied candles that reveal indecision in the market. Their long wicks and small body show a directional bias, and they help build the intuition to read what price is doing.
• A candlestick pattern is only one confluence and should not trigger a trade alone. A bullish doji inside a downtrend that keeps breaking structure lower shows why bias must not get lost in patterns.

Questions & Answers

Q: What does a single candlestick represent on a chart?

A candlestick represents all price action during one selected time period. On a 5-minute chart, one candle contains 5 minutes of market movement, including its opening, closing, highest, and lowest prices.

Q: How do you read a candlestick body?

The body's edges mark the opening and closing prices. A green candle opens at the bottom of its body and closes at the top, while a red candle opens at the top and closes at the bottom.

Q: What do candlestick wicks show?

Wicks show prices reached during the candle's time period where price did not close. The upper wick ends at the highest price reached, and the lower wick ends at the lowest.

Q: Why does the chart time frame matter when reading candlesticks?

The selected time frame determines how long each candle takes to close and how much price action it contains. For example, one candle on a 5-minute chart represents exactly 5 minutes of movement.

Q: What does a long upper wick with a close below it mean?

It shows that buyers pushed price higher but were not strong enough to close at those upper levels. The speaker interprets that rejection, potentially after taking liquidity, as evidence of weakening bullish momentum.

Q: What does a doji candlestick indicate?

A doji is a small-bodied candle that signals market indecision. Its body and wicks can also provide a directional bias by showing where price was rejected and which side was losing momentum.

Q: Which candlestick patterns does the speaker trust?

The speaker values single-candle patterns such as dojis and hammers because they directly display price action and rejection. Multi-candle formations such as head and shoulders, W patterns, and mountain tops are dismissed as unreliable.

Q: Why should candlestick patterns not be used as trade signals by themselves?

A candlestick pattern is only one confluence and does not justify a trade on its own. A bullish doji can appear during a downtrend that continues breaking structure lower, so the broader trend must remain part of the decision.

Summary & Key Takeaways

• Day two of the boot camp covers candlesticks and price movement. Nearly every chart, on any ticker, displays candlesticks made of bodies and wicks. These candles describe price and tell a story, and understanding them is presented as beneficial even for viewers who think they already know the basics.

• Each candle is tied to a chosen time frame, so on a 5-minute chart one candle equals 5 minutes of price action. A green candle opens at the body's bottom and closes at the top; a red candle opens high and closes low. Wicks mark the highest and lowest points price reached.

• Only single-candle patterns like dojis and hammers are valued because they show rejection and price action; multi-candle patterns are dismissed. Long wicks reveal weakening momentum and dojis signal indecision, but the speaker stresses these are only one confluence and cannot justify a trade against the prevailing trend.