Weekend Market School

Today's Lesson: Reading candlestick charts

Welcome to our lesson! Today we will learn the alphabet of charts: the candlestick pattern. When you finish this lesson, the green and red candles on the screen will no longer be simple rectangles; each one will tell you the story of a day.

1. What is it?

Let's start with a simple analogy: Each candle is like a day's report card for the stock.

• Open: Entry grade

• High: The best moment of the day

• Low: The toughest moment of the day

• Close: The final grade

Clear definition: A candlestick chart shows four values of the price in a single visual in the time frame you choose (day, week, minute): open, close, high, low. The body draws the range between open and close; the wicks (shadows) draw the day's peak and bottom. If the close is above the open, the candle is green ( (buyers won); if below, it is red ( (sellers won).

2. Why is it important?

• Price says "what," the candle says "how." " "120.00 TRY" is a number; the candle tells how that number was reached.

• It is the score of the daily battle. Did buyers or sellers win? Color and body tell that.

• It lays the groundwork for risk management. Wicks give the idea of a natural stop level.

• While annual inflation is 29.7% keeping money on the sidelines causes it to lose value; therefore, reading quickly is as important as reading accurately.

3. How to Read / Use?

Step 1 — Look at the color: Green = close > open. Red = close < open. The color tells the winner of that day.

Step 2 — Look at the body: A long body means a clear winner. A needle-like short body (doji) means indecision.

Step 3 — Look at the wicks: A long upper wick shows that the rally attempt was pushed back by selling. A long lower wick shows that buyers from the bottom are strong. In short: the body shows strength, the wick tells the story.

Step 4 — Read the sequence: A single candle is a clue; two or three candles in a row are a signal.

Step 5 — Put it in context: Reading candles without trend direction and volume is like reading a sentence from a single letter.

Basic patterns:

• Doji: Open and close are almost the same; indecision.

• Hammer: Small body + long lower wick; a reversal candidate after a decline.

• Shooting star: Small body + long upper wick; a warning after a rise.

• Engulfing pattern: One candle's body completely wraps the previous body; power has changed hands.

Note: The color code may vary from platform to platform. Make it a habit to check the chart legend.

4. Real Example

This week's sample stock MGROS. In the last 30 trading days, the series % declined by 8.9; price range 470.00 TRY – 547.50 TRY. Let's read it together:

• The 30-day total is negative, meaning the bodies of red candles are larger than the greens in total: sellers have taken the month's report card.

• 547.50 TL the peak of the series. If upper-wick candles are seen in the peak zone, it means there is selling pressure there; 547.50 TRY is a resistance candidate.

• 470.00 TL the bottom of the series. If hammer-like, lower-wick candles form here, it means it is the buyers' defense line; 470.00 TRY is a support candidate.

The most active stocks of the day are also a nice exercise: ASTOR from 164.90 TRY 9.99%, TRMET from 120.00 TRY 6.18%, GUBRF from 372.75 TRY 5.51% has lost value. The candle of such a day is usually drawn like this: a thick-bodied, short lower-wick red candle. That is, sellers dominate from open to close. But is that enough? It is not enough; the next day's candle is the confirmation. Don't look at the peak, look at the confirmation.

5. Common Mistakes

• Worshipping a single candle: A single candle is not a decision, it is a clue. Wait for the next candle as confirmation.

• Skipping the context: In a sideways market, the hammer pattern can be noise. Always look at the trend and volume.

• Mistaking wicks for definite support-resistance: Wicks are attempts; confirmation comes with close and volume.

• Mixing up time frames: The daily red candle is inside the weekly green candle. Know which window you are looking through.

6. Mini Test

Question 1: A candle opens at 100.00 TL, closes at 102.00 TL, high is 103.00 TL, low is 99.00 TL. What is its color, and how long is the body?

Answer: Because the close is above the open, it is green. Body 2.00 TL; upper wick 1.00 TL, lower wick 1.00 TL.

Question 2: At the bottom of a downtrend, a candle with a small body and a lower wick twice the length of its body formed. What is its name, and what does it signal?

Answer: Hammer. Sellers pushed the price deep down and buyers recovered it; it is a reversal candidate, but a confirmation candle is expected.

Question 3: The top of MGROS's 30-day series is 547.50 TL. One day the price touched 547.50 TL and closed clearly below it. What do we see in the candle, and what does it mean?

Answer: Long upper wick. It means selling pressure exists in the peak zone; 547.50 TL is a resistance candidate.

7. Summary

• A candle is the single visual of four values: open, close, high, low.

• The color tells the winner, the body tells strength, the wicks tell rejected prices.

• Patterns are clues; without confirmation they are not decisions.

• Support and resistance candidates are shaped by candle bodies and wicks.

• Always read with the big picture: trend, volume, time frame.

Our weekend lesson ends here. Open your charts and try building three-candle stories. See you in the next lesson!

This lesson is for educational purposes, not investment advice.