Indecision and rejection
A doji (tiny body, open ≈ close) is indecision — a tug of war. A hammer (small body, long lower wick) after a decline shows sellers were overpowered late — potential exhaustion. A shooting star (small body, long upper wick) after a rise is the bearish mirror.
Context is everything: a hammer at support after a downtrend means something; the same candle mid-range means little. A single candle is a hint, never a standalone trade.
The candles worth knowing
A handful cover most of what's useful:
- Doji — tiny body, indecision; a tug-of-war between buyers and sellers.
- Hammer — small body, long lower wick; lows rejected, potential bottom after a fall.
- Shooting star — small body, long upper wick; highs rejected, potential top after a rise.
- Marubozu — big body, almost no wick; one side dominated the whole session.
Context is the whole game
The same candle means different things in different places. A hammer at a tested support after a downtrend is meaningful; the identical candle floating mid-range is noise. Treat a single candle as a hint that nudges the odds — then confirm with the next candle, the level it formed at, or the volume behind it.