A candlestick is not just a price bar — it is a visual summary of the battle between buyers and sellers in a specific time period. Once you understand what each part of a candle reveals, you will never look at a chart the same way.
What Is a Candlestick?
A candlestick is a chart element that shows four prices for a given time period: the Open, High, Low, and Close. These are called OHLC values. Candlestick charts originated in Japan in the 18th century and are now the standard charting format used by traders worldwide — including on NSE and BSE.
Each candle represents one time period — one minute, five minutes, fifteen minutes, one hour, or one day depending on your chart timeframe. On a daily chart, each candle represents one full trading session (9:15 AM to 3:30 PM on NSE).
Anatomy of a Candlestick
- Open (O): The price at which the instrument traded at the very start of the period. On the NSE daily chart, this is the first trade of the session at 9:15 AM.
- High (H): The highest price reached during the entire period. Represents the maximum point buyers pushed price to.
- Low (L): The lowest price reached during the period. Represents the maximum point sellers pushed price to.
- Close (C): The final price at the end of the period. On the daily chart, this is the 3:30 PM closing price — the most important price of the day because it reflects the final consensus of all participants.
- Body: The rectangular box between the Open and Close. Shows the net movement of price during the period.
- Wicks (Shadows): The thin lines above and below the body. The upper wick extends from the body top to the High. The lower wick extends from the body bottom to the Low.
Bullish vs Bearish Candles
A candle is either bullish (green/white) or bearish (red/black):
- Bullish candle: Close is above Open. Price moved UP during the period. The body is coloured green (or white in older charts). The Open is at the bottom of the body; the Close is at the top.
- Bearish candle: Close is below Open. Price moved DOWN during the period. The body is coloured red (or black). The Open is at the top of the body; the Close is at the bottom.
- Doji: Open and Close are at the same (or very similar) price. The body is very small or non-existent. Represents indecision between buyers and sellers.
Reading Buyer and Seller Pressure
The real power of candlestick reading is in understanding what each part of the candle reveals about who was in control:
- Large green body, small wicks: Buyers dominated the entire session. Strong bullish sentiment. Sellers barely made an appearance.
- Large red body, small wicks: Sellers dominated. Strong bearish sentiment. No meaningful buyer pushback.
- Long upper wick: Buyers pushed price high during the session, but sellers stepped in strongly and pushed it back down before the close. The upper wick shows rejection of higher prices.
- Long lower wick: Sellers pushed price low, but buyers stepped in strongly and recovered most of the loss before close. The lower wick shows rejection of lower prices — a bullish signal at support zones.
- Small body with long wicks both sides: Neither buyers nor sellers won. Maximum indecision. This is a Doji or spinning top — a signal to wait for the next candle for direction.
The Close is the most important price on any candle. Where price closes relative to the range tells you who won the session. A candle that makes a new low but closes near the top of its range = buyers won despite the selling pressure. A candle that makes a new high but closes near the bottom = sellers won despite the bullish attempt. Always look at the close before making judgements about a candle.
OHLC on NSE — What to Know
- Pre-open session (9:00–9:15 AM): NSE runs a price discovery session before the regular market opens. The Open price of the daily candle is determined in this session. It can be significantly different from the previous Close — creating a gap.
- The daily close (3:30 PM): NSE uses a weighted average of the last 30 minutes of trading (3:00–3:30 PM) to calculate the official closing price. This is why the Close on the NSE daily chart can sometimes differ slightly from the 3:29 PM last traded price.
- Circuit breakers: If a stock hits its upper or lower circuit, trading halts. The High or Low of the candle will be exactly at the circuit limit price on those sessions.
Candles on Different Timeframes
- 1-min candle: Each candle = 1 minute of trading. Used by scalpers. Too much noise for swing traders.
- 5-min candle: Popular for intraday trading in India. Shows good detail while filtering minute-to-minute noise.
- 15-min candle: The recommended timeframe for Nifty intraday entry signals. Widely used by Indian retail traders.
- 1-hour candle: Used for context — identifying key levels and zones within the daily trend.
- Daily candle: The foundation. Each candle = one full trading session. Used for trend identification and swing trade setups.
- Weekly candle: Each candle = five trading sessions. Used by positional traders to identify major support/resistance levels.
For Nifty intraday trading: daily chart for direction, 1-hour chart for context and zones, 15-minute chart for entry signals. This three-timeframe approach covers everything you need without information overload. For swing trades: weekly chart for major structure, daily chart for entry zones, 4-hour chart for entry signals.
Common Candlestick Mistakes for Indian Traders
- Trading every pattern you see. A hammer candle in the middle of nowhere is worthless. A hammer at a key support level with declining volume pullback is high probability. Context determines value — not the pattern alone.
- Reacting to the candle before it closes. A candle that looks like a hammer at 2:45 PM may close as a regular bearish candle at 3:30 PM. Never trade a daily candle pattern until the session closes.
- Ignoring the prior trend. A bullish engulfing candle in a downtrend is a counter-trend signal with lower probability. The same pattern at a pullback within an uptrend is high probability. Always check the trend first.
Open TradingView. Set any Nifty chart to daily timeframe. Pick any 10 candles and for each one, identify: Open, High, Low, Close, body size, wick size, and what the candle tells you about buyer/seller balance. Do this before moving on to specific patterns. Read next: Hammer & Shooting Star on NSE Charts.