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Charting
How to Read a Candlestick
One little shape packs four prices and a story about who won the bar. Here is how to read it.
NoVo Options Trading · 2026
A candlestick shows four prices for a time period in a single shape: the open, high, low, and close. The thick part - the body - spans the open and close; the thin lines - the wicks or shadows - reach to the high and low. Green (or hollow) means it closed up; red (or filled) means it closed down.
What the body tells you
The body shows who won the period. A long body means one side dominated open-to-close; a tiny body means buyers and sellers fought to a draw. A series of long green bodies is momentum; a cluster of tiny bodies is indecision, often near a level where the market is deciding what to do next.
What the wicks tell you
Wicks are where price went but could not stay. A long lower wick means sellers pushed price down but buyers slammed it back up - a rejection of lower prices. A long upper wick is the reverse. Rejection wicks at a key level are among the more useful single-bar tells, because they show real-time failure of one side to hold ground.
The body is who won. The wicks are where the loser tried - and failed - to take control.
Patterns are context, not prophecy
Named patterns - dojis, hammers, engulfings - are just recurring body-and-wick shapes with sensible stories behind them. They are worth knowing, but they are probabilistic hints, not signals. A hammer at major support with rising volume means something; the same shape mid-range in dead volume means little. Read candles alongside VWAP, volume, and structure - never in isolation.
More on this: Can a Vision Model Read a Chart? · The TTM Squeeze: Bollinger-Keltner Overlap, Explained · The Harami, Explained · Why Indicators Confirm, Don't Predict · Trading Psychology 101
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NoVo is a software tool for market analysis and for executing trades you initiate, not financial advice. This article is general education, not investment advice. Options trading involves substantial risk of loss, up to and including your entire capital. NoVo makes no guarantee of profit, win rate, or performance, and past results do not predict future outcomes. You are responsible for your own broker account, configuration, and trading decisions.