3) Technical Analysis

What is Candlestick

Those colorful bar-shaped charts aren't just decoration — each candlestick tells the story of the battle between buyers and sellers that day. Learning to read candlesticks = learning to read market emotions.

Definition

A candlestick is a visual representation of price movement within one time period. Each candle shows four pieces of information: opening price (open), highest (high), lowest (low), and closing price (close). A green/white body means price went up, a red/black body means price went down.

Simple Explanation (Analogy)

Think of a candlestick as a stock's daily diary. Each candle tells a story: 'Today, the story began at this price (open), reached as high as here (high), dropped as low as here (low), and the story ended at this price (close).' A long body = big drama that day. A long shadow/wick = fierce resistance happened. A small candle = a quiet, boring day.

Indonesian Stock Example

Look at BBCA's chart: consecutive long green candles usually appear when strong financial reports come out or there's positive sector sentiment. Conversely, a long red candle with a small lower shadow appeared on GOTO during negative sentiment, indicating sellers completely dominated with no meaningful buyer resistance.

Candle & Wave Visuals

Bullish Marubozu

Bearish Marubozu

Doji

Hammer

Inverted Hammer

Shooting Star

Hanging Man

Spinning Top

Impulse Wave (Step-Up)

Corrective Wave (ABC)

Range / Sideways

How to Use

Understand basic candlestick anatomy: body (open-close difference), upper shadow (high-close or high-open difference), and lower shadow (open-low or close-low difference).
Watch the body size. A large body shows strong momentum. A small body shows uncertainty or buyer-seller balance.
Read the shadows/wicks. A long lower shadow means buyers successfully fought selling pressure. A long upper shadow means sellers managed to push the price down from its high.

Common Mistakes

Only looking at candle color without context. One red candle after 10 green candles doesn't mean the trend has changed.
Ignoring shadows/wicks. Shadows often tell a more important story than the body — they show areas where price was rejected.
Analyzing individual candles without looking at the candles before and after. Candlesticks are most meaningful when read in pattern context.

Internal Linking

Tools BBCA

Tool CTA

After understanding this concept, apply it in tools so decisions become more objective and measurable.

Open Profit / Loss Calculator

FAQ

What timeframe is best for reading candlesticks?

For investors, daily or weekly candlesticks are most relevant. For traders, you can use 15-minute, 1-hour, or 4-hour depending on your trading style. The larger the timeframe, the more reliable the candlestick signals.

Why do candlestick colors differ across platforms?

Each platform has different default color settings. What matters isn't the color but the meaning: a body showing close above open = bullish candle, a body showing close below open = bearish candle. You can customize colors to your preference.