The Candlestick graphically represents where the market opened and closed. The body represents that area of price range, between open and close where buying and selling support was forthcoming. If it was a black body one immediately recognizes that the bears won the battle that day and if a red body the bulls were in ascendance. The shadows tell of the failed attempts of bulls or bears to take the market their way. An upper shadow tells us the bulls attempted to take the market higher, by the length of the shadow, but their efforts failed to attract further buyers to join in the bull thrust, it only attracted sellers sufficient to accommodate the would-be buyers. On failing to drive the market higher the bulls retreated, beaten down by sellers, to the comfort of the body. Conversely the lower shadow indicates the extent of the failure of the bears to take the market lower. As bears sold, bulls were ever present to buy up anything offered at these new lower prices. On recognizing the overwhelming preponderance of buyers the shorts retreated to the cover of the body.

This is the nice thing about Candlestick price patterns, it lays out in immediately recognizable graphic form, the underlying forces of the market participants of the day, or whatever period under study, month, week, hour, minute. Candlesticks tell a story, the market is telling you much of what you need to know. If you know how to read the Candlesticks and recognize the lexicon of patterns and heed the market message you are well equipped to successfully participate in the market.

A whole lexicon has developed to describe various price formations. We will introduce them as we come upon them and eventually develop a glossary of terms. A whole galaxy of patterns are documented with titles which are usually military in metaphor and are highly descriptive of the meaning of the patterns. In general though the patterns fall into two categories much as do our price patterns, i.e. there are patterns of reversal and patterns of continuation. We will, over time, cover all these patterns with real life timely examples.

Recognizing patterns in the market is a critical resource for today's trader. Combining candlestick charting techniques with traditional technical approaches creates a powerful formula for the savvy investor. This page provides an introduction to candlestick charts and descriptions for the complete list of candlestick chart patterns utilized by mGlider.