How To Read Candlestick Charts and Predict Prices For Beginners

What is goodie, my people? We are back again with another gem. Now this video is probably one of the most highly requested videos. I get asked for all the time, and it's basically how do you read charts? How are you able to predict the price of certain stocks, cryptocurrencies, currencies as a whole? So today I'm about to get into it. I'm gonna break it down for you guys on a beginner's level. If you guys want to get more in depth into it, let me know right now. Like to be running out for more tutorials, I guess you could call it, but I'm going to break down these charts or how can read these charts in a very simple matter. Because I know when I was trying to learn how to read charts, I was watching all these YouTube videos and it was all complicated. People was telling me all this crazy stuff. They was using all these big words, they was using all these big terminologies, and I didn't understand none of it. So I'm gonna try and make it very simple for if you're even a 5-year-old, you'll be able to go on this, go on this website, look at a chart, and be like, yeah, it's finna go up, dad, put a buy in, you feel me? So without further ado, let's just get right into this. So here we are in TradingView. I made up all these drawings. You might be like, what the heck is this stuff? I'm going to explain to you guys. But first of all, when you guys are in, um, well, when you guys are going to look at charts, basically you got to go to TradingView. This is what most people— I can't even type right now, what is going on? You're going to go to TradingView. This is what most people use if you're a trader, if you're anybody that looks at stocks, crypto, regular currencies. This is where most people trade on. So this is the home screen. It's gonna look something like this. All you gotta do is come in the top left corner and press chart. And it's basically gonna take you to kind of the screen that I was at before. But before we get into an actual chart, I made a little drawing for you guys. I hope you guys can appreciate my drawing skills. We got a red candlestick, green— why are these two greens different colors? Let's just imagine they're both the same color, right? A red candlestick. You might be like, what's these lines on the top? I'm gonna explain it all for you. I'm gonna explain it very simply too, so you gotta understand it completely, hopefully, by the end of this video. If you need to watch the video back again, I'm gonna try and make the video not long at all. But let's just hop right into it. So we have all these red candlesticks, we have these green candlesticks. Basically what these mean— these candlesticks mean is red, it went down. Green, it went up. Green, it went up. Red, it went down. And when I say goes down or went up from— it's went down or went up from the previous candlestick. So I didn't draw these out perfectly how they would be on a regular chart, but let's just imagine the price came down from the top of this red one all the way down here. Um, and let's just imagine this candlestick started right here because each candlestick— now I gotta move my line, hold on, I should put the line up here. Um, each of these candlesticks represents a certain time frame that you chose. Now, um, if you look in the top left corner up here, you can say 5 minutes, 15 minutes, 30 minutes, an hour, 4 hours. Each of these consider whatever time frame you choose. So for right now, we're gonna be talking about an hourly time frame, and what that means is basically each of these candles represents what happened in 1 hour. Now, let's say 4 of these together, if I put on a 4-hour timeframe, all of this, all these 4 candles will be bunched up into 1 candlestick. And I'll show you guys what I mean in a little second after I get through my drawing, kind of explaining what the heck candlesticks are, how you can read them and everything like that. So you might be wondering, we have this big body of red and then we have lines at the top and lines at the bottom. And in some of these drawings, the lines are really long up here with a small body, Some of it is really small body with long lines on the top and long lines on the bottom. And some is a real big body of red or green, whatever it is, with little lines on the top and bottom. And basically what this means, we call the part with the thick— she thick, thick, thick— but we call the thick part, right, the part that has all the color on it, that is called the body. These lines are called wicks. So if you know a regular candle, like I don't got a candle, I don't even know why I was looking around. But just imagine a regular candle, what's the part that you light, that you put on fire? It's called the wick, right? So these are all different wicks. The wicks can be different sizes depending on what I'm about to tell you guys in a little second. So like I told you guys, all of these represent what happened in 1 hour. So what that means is, let's say the price started all the way up, hold on, let's say the price started the hour before, the price ended right here. This is where the last candlestick ended. Let's just imagine— hold on, what's going on, man? Take this off. Um, let's just imagine— let me move this over. Let's just imagine the price was right here. It went all the way up to the top of here and came all the way down here. Now the next hour, let's say this candlestick was 12 noon, it hit 1 o'clock, and now the candlestick started right at the top of this one. That means the price went in this whole hour, in all of 1 o'clock, 1:05, 1:10, whatever it was, the whole entire 1 o'clock, right? It started right here. That means the price went all the way down to the end of this wick and could have went all the way up to the end of this wick. But after the hour's up, after 1:59 hits, well, after 2 o'clock hits, the price ended in this box. So this is where the price was as a whole in this box at the end of that 1 hour. Once that hour timer is up, the price was here. Now, like I said, within that hour could have went all the way up here and all the way down here, but it stayed in this area, or this is where it closed. Then on to the next candlestick. So this was 1 o'clock, this is 12 o'clock, this was 1 o'clock. Now this would be 2 o'clock. Let me put my drawing back to where I had it just for purposes of showing you guys. Um, so like I said, these aren't all perfectly drawn out because technically this candlestick would have started— actually, it started perfectly right here. Did I do that before? I don't know. But the price would have started literally right here, um, at the bottom of here, if the— if this was the candlestick that was after this one. And the price would have went all the way up here. But at the end of 2 o'clock, because this is the candle that represents 2 o'clock PM, whatever it is, whatever time frame it is, but let's just say for example this is 2 o'clock, the price went all the way up here. But at the end of 2 o'clock, when 3 o'clock hit, the price was only right here. Now you can see it's green because it rose from the previous that it closed out. It closed literally right here. When we say closed, I mean that's the end of that, um, candlestick, the end of that hour or whatever time frame you have. So if it's the end of a minute time frame, whatever candlestick you chose, 5-minute, 15-minute, but for now it's the end of the hour time frame. So the price closed right here at the end of the time frame. The price started right here at 2— this is our 2 o'clock candle or 3, I forgot. Let's just say it's a 2 o'clock candle. The At 2 o'clock, the price was right here. The price literally— oh wait, what's going on? Why is it still drawing? Oh, okay. So at 2 o'clock, the price was literally— why is it pulling the line? This is just messing me up right now. I'm just trying to— let me move this line out the way. The price started all the way down here, right? And then during the whole time of 2 o'clock, it could have went all the way up here, but then it ain't like this area. So it came all the way back down here and it closed, ended up closing right here and onto the next hour. So this would be the next hour, this would be 3 o'clock candle. But basically what that means is if you see all these different lines, these lines tell you stuff. The body tells you stuff, but the lines, as in where the price was at throughout that whole entire hour or whatever candlestick you have, it helps you predict what the next candlestick might do. Now like I said, this is called technical analysis. If you're a trader, you know this technical analysis, which is looking at charts. Is fundamental analysis, which is kind of like the news. Like, let's say for Bitcoin, if Elon Musk tweets, yo, Bitcoin is the best thing in the freaking world, it's gonna go all the way up just because of the fundamentals of Elon Musk saying Bitcoin's going all the way up and the price will move. Um, it's fundamentals, technical analysis, that's the main two. There are different other analysis, but the main two are fundamental and technical analysis. Now, like I said, charts, it's technical analysis, and they're not always 100% right. Nothing is ever 100% right. No fundamental analysis is 100% right. No technical analysis is 100% right. We just use technical analysis to help us predict our next move. If we're trying to go on for a buy, we're trying to go for a sell, if we're thinking, okay, is now a good time to buy Bitcoin, or should I wait because Bitcoin is too high right now? This will tell you it all, or kind of give you a whole wide view scale thingy of what the heck is about to happen next, or what might happen next, I should say. So like I was saying, all of these wick parts, because we know what wicks are now, it's the lines, all of these wicks tell us certain things. They're kind of tattletales. They're kind of like, okay, the next candlestick is probably going to do this, you feel me? So there are different candlesticks that we can, that can name: doji, shooting stars, gravestones, hammers. I'll try and get into all those before the video's up. I don't want to make this video too long. I just kind of want you guys to understand the basics of it, so when you look at a chart, you're like, okay, this is what this means, this is why this candlestick looks like this, this is why this next candlestick might be this. I just want to give you guys basics, but like I said, you can get really deep into it with different indicators. If you guys make— if you guys want me to make a video about like my favorite indicators I can do that. And basically what indicators are, they're basically things that will also help you predict certain things within technical analysis. Like I said, they're not 100% correct though, but they can help you and, um, in your prediction of price point action and stuff like that. So, um, where was I? I was talking about the different patterns, right? So this would be considered an inverted hammer. This would be considered a doji. This regular candlestick, this is a regular candlestick. Um, and basically what these mean— so this inverted hammer, right? A hammer would be the complete opposite, which would be the price up here. It would be a red candle or whatever, whatever color it is. It's just the price, the full body of it will be on top here. This would be a hammer up here. This is the inverted hammer. And basically what these things mean— and keep in mind, everything I tell you, all these patterns can be reversed. So if I show you it, an example, and one is green. It can also be an example of red. I'll try and get into those examples a little bit later. But, um, basically what this hammer would mean if I saw this— if I saw a whole, um, uptrend, let's say it was a bunch of green candles, big green candle. Let me just draw, for example. Okay, let's just imagine this is green. Actually, just make it green real quick. So this is green. We have one green candlestick right here. We have another green candlestick right here. I see a whole bunch of green candlesticks going up. That means it's on an uptrend, right? Because going up, the trend is up. If it's a lot of red candlesticks going down, the trend is down. Very simple stuff. So if it's on an uptrend and I'm trying to go in for a sell, I'm trying to— I'm waiting for the price to tell me, okay, the price is about to go down, I want to go in for a sell. I would look for something like this. Inverted hammer, a green inverted hammer. And basically why I would look for this is just due to the fact that we have a bunch of candlesticks going upwards, and then this candlestick right here, it looked like it was going up because throughout that hour it went all the way up here, but then it ended up closing down here because it didn't like the area up here. It did not like being this high up. It didn't like the price up here, so the price came all the way back here. So that's telling me, okay, it didn't like being that high, so maybe this is the end of the uptrend.. And then I would look for another confirmation where it's like the next candlestick comes down and maybe it looks something like this, this doji right here. Um, or even better, if it looks like a— if it's a little red one— I can't even pull my drawing without the line— if it's a red one that is, um, comes down like this where the line comes up, where the price comes up during the time frame the wick, but then it ends up going down. I would see that as, okay, now this is a different trend. The trend is changing. It was going up, green, green, green, up, but then the price came all the way up here, it didn't like it, so it came down here. Then the next time frame, it started right at this line, like I said, it started literally at this line. It went up here again to try and go higher. The price tried to go higher, but it did not like it, so it ended up coming right back down here., then this would tell me, okay, the price is probably going to keep going down. And like I said, it's not 100% all the time, but, um, it can help you predict it. I'll try and show you guys some examples in a second, um, but that's basically what a hammer would mean. And it could be the same thing on reverse if you just imagine a bunch of red candles coming down here and then you get a red one with a long wick on the downside. So that means the price tried to go all the way down here and keep the downtrend going, but instead it ended up closing right here. You feel me? Because then that would show me, okay, the price doesn't like being down here, it's probably gonna try going up now. You feel me? So let me try and show you guys some real life examples. Let me clear this drawings, everything like that. Boom. So this is what a real candlestick would— uh, a real candlestick chart would look like. Now on TradingView, you can have multiple different charts. You can have a line chart, which is probably what you see on Robinhood or Coinbase or whatever, baseline chart. You can have like a bunch of different charts, but we use candlestick charts because they're the easiest to help us predict certain price movements. And just like I was telling you guys about before, this inverted hammer, um, or this, this gravestone doji um, right here it was on a downtrend. We see red, a little green candlestick, a big red candlestick. It's on a downtrend coming from all the way up here all the way to down here. Then we see this candlestick where it's a long wick at the bottom. That means the price tried to go all the way down here, it did not like it, and then what it ended up doing next, a bunch of green candlesticks going on uptrend. So like I'm saying, it helps you predict certain things. Um, let me try and find another example for you guys. Right now I'm on a Bitcoin, um, chart, Bitcoin to US dollar, which basically means Bitcoin versus the US dollar, which in simple terms is literally just how much US dollars is one Bitcoin worth. Um, this over here is just like my favorites list of different currencies. Ethereum versus the US dollar, which is how many US dollars is one Ethereum worth, and all different type of stuff. Now this chart looks very messy. We see a lot of big, um, green candlesticks, a lot of big red candlesticks, a lot of wicks, a lot of long wicks just doing a bunch of stuff. So I'm gonna try and— I'm gonna go to a daily chart because it might be easier to just see some stuff. Let me try and find an example of a doji, which is the end— we call it the end of a trend candlestick. I can't find one right now, but we can use this as an example. Again, we see a little body right here. It's on a downtrend, a bunch of red candles, a little body right here. The price came all the way down here during the hour. While I'm on a daily chart right now, so the price came all the way down here during the day, but it closed right here. Then right after this candlestick, what did it do? Shot all the way up and started an uptrend, going up. Uptrend basically just means higher highs and higher lows. So what I mean by that is, so each price— price doesn't just go straight up. Price goes up and down a little bit, up and down a little bit, up and down a little bit. So for example, um, let me draw it out for a second. So price goes up, down a little bit, up, down a little bit. Price never goes straight up like that. That's just not what price does. It'll go, like I said, up, down a little bit, up, down a little bit, up, down a little bit. And that's considered an uptrend versus downtrend would be down, up a little bit, down, up a little bit, down, up a little bit. So, um, basically what I'm saying is higher highs and higher lows. Just means there's a high, high right here. This is a high, and then this is the low point. This is the lowest point it went before going right back up. So then this would be another higher high because this is the highest point before it went going up. And then this would be the next lower low because this low is higher than this low. Well, this, this, this low up here is higher than this low. This high up here is higher than this high. So that's how we know it's an uptrend because we have higher highs, which are these up here and higher lows, which are these right here. And on a downtrend, we have lower lows and lower highs. So if you can just flip the example I just said, this is a, um, this would be considered the high, this would be considered the low. This is a lower low because this one right here is lower than this one. And this high right here, well, this high right here would be lower than this one. So higher highs and higher lows, that's how you predict or kind of see what type of trend it on. It's on, um, whether it's on an uptrend or downtrend. And for example, let me show you guys on a candlestick chart. Um, so this is a nice little uptrend right here. Um, sorry, I did not mean to draw that. So just imagine it's coming from here, high, came down a little bit, high, came down a little bit, high, came down a little bit. So this would be considered an uptrend because we have— this is our first high This is our second high. This high is higher than this high, so we're on an uptrend. This high is higher than this high, so we're still on an uptrend. And like I said, higher lows. This is our first low, this is our second low, and our third low would be over here. So this would be the change of a trend, because as you see, this is a higher high, then a low, higher high, then a higher low, higher high, then a lower low, because this low is now lower than this one. And then you see how the price just starts going down. The price goes up a little bit and then down all the way here. So the price changed from being in an uptrend to a downtrend. That's how you kind of just tell, um, if the price is on an uptrend or downtrend. That's the fast way to do it. Now, like I said, you can get more in depth into it, but I just want to show you guys just the, um, the basics of it and everything like that. Um, if you guys want me to do a video getting into like all the different candlestick patterns, because I showed you guys just few candlestick patterns that show you if a price is going to go up or price is going to go down. Um, like for example, here is a, um, I just seen one. A shooting star would be considered this one right here. This is a shooting star right here, which would basically mean, um, this little green candlestick, we see it went down here and then most of the body, it's a big body on the top of it. This is not a perfect example. Uh, okay, this is a better example. So, um, this green one right here, we see we had a red candle went all the way down here, didn't like being in this area, but so I ended up closing over here. And this candlestick right here end up being a shooting star, which is basically when it's a long wick at the bottom, like right down here, long wick at the bottom, and then the body is at the top, which means the price tried to go down here but the price ended up closing all the way up here, and then it shows you it's going to go up. That's what happens most of the time. Um, we see a A shooting star versus a reverse shooting star, inverse shooting star. If I can find an example really fast, this one right here, this candlestick right here, where it's long wick at the top, the body's at the bottom, and then it keeps going down. Then we get a little doji right here. We have a small body, it goes up a little bit, down a little bit, um, well, the wick is up a little bit and the wick is down a little bit as well. So that means there's uncertainty in the market. The market doesn't know if it wants up or down. So if it's on a downtrend, then we get a big doji. Most of the time that's the end of the trend, and in this example it is the end of the trend because we have— it was going down right here, but then it ended up reversing, giving us a big full candlestick. We barely see any wick on this candlestick, and then you see the price just shoots all the way, all the way up here. Um, so I hope I'm making it pretty simple for you guys. I think I'm gonna stop now. I can make a more in-depth video about different patterns because there's patterns on, um, that don't just include one candlestick. They can include this whole high right here, this whole high right here, this whole high right here, and this whole high right here, kind of making support and resistance zones. I'll make a video about that if you guys want. Let me know in the comments down below. I hope it was simple. If you guys have any questions, just drop inside the comments down below. I'll try and answer them inside the comments, or if I need to, I'll make a video about it. Um, yeah, I hope I made it pretty simple. Not complicated, because I know when I was trying to learn this stuff, it was pretty complicated. I was watching hours and hours of videos of people telling me wicks and candles, and I was like, what the heck does this mean? But in this video, I tried to be as simple as possible, and I just wanted to be basic. I didn't want to get too in-depth into what the heck all these different patterns mean, support and resistance, all these different— drawing all these lines and shapes and everything like that. But yeah, if you guys enjoyed it, make sure you like right now. I'm seeing you on the next video. Stay safe, good luck on all your trades. Like I said, if you have any questions, drop me a comment down below.