Anatomy of a Candlestick
Every candlestick tells a story of the battle between buyers and sellers during a specific time period. The body shows the range between open and close prices. The wicks (also called shadows) show the highest and lowest prices reached. A green/bullish candle means price closed higher than it opened. A red/bearish candle means price closed lower.
What the Body Tells You
Large body: Strong conviction. Buyers (green) or sellers (red) dominated the period. This is what SMC traders call displacement โ a sign of institutional participation.
Small body: Indecision. Neither buyers nor sellers could take control. Often seen before major moves as institutions accumulate before displacing.
What the Wicks Tell You
Long upper wick: Buyers pushed price up but sellers rejected it. The longer the wick, the stronger the rejection. In SMC, this often marks a liquidity sweep above a key level.
Long lower wick: Sellers pushed price down but buyers rejected it. This often marks a sweep of sell-side liquidity below a key level.
Key Candlestick Patterns for SMC
Engulfing candle: A large candle that completely covers the previous candle. Bullish engulfing after a downtrend signals reversal. This candle often becomes an order block in SMC.
Pin bar / Hammer: Small body with a long wick. Shows rejection of a price level. In SMC, pin bars at order blocks or liquidity levels are high-probability signals.
Doji: Open and close at nearly the same price with wicks on both sides. Shows complete indecision. At key SMC levels, a doji followed by displacement confirms the level.
Reading Candles Like Smart Money
Most retail traders memorize pattern names. Smart Money traders read the story behind each candle: who is in control, where is liquidity being taken, and what is the institutional intent. Quantum Algo helps by highlighting the candles that matter โ the ones showing institutional displacement, order block formation, and liquidity sweeps.