Candlestick

A candlestick is a type of price chart that displays the open, high, low, and close prices of an asset within a specific time period. Each candlestick consists of a body and wicks, showing both the price range and directional movement during that period. Candlestick patterns are widely used by traders to identify potential market reversals or continuations.

A trader analysing a 15-minute chart might spot a bullish engulfing candlestick pattern after a period of selling pressure. This pattern, where a larger green candle fully engulfs the previous red candle, can signal that buyers are stepping in and a reversal may be forming. In a prop firm challenge, traders often rely on candlestick patterns combined with key support and resistance levels to time their entries more precisely, helping them manage risk and protect against unnecessary drawdown while pursuing their profit targets.