How to Chart Stock Movements with Candlestick Charts

Choose a stock to chart. For this exercise, we're just going to make one candlestick, so you only need the closing information for one day's trading for one stock. The chart shows the historical price data for Satyam Computers for May 18, 2009. You'll need the opening price, closing price, high and low for the day.
On a piece of graph paper, label the vertical axis with numbers from the lowest price of the day to the highest price of the day.Ex. The stock we're charting hit a high of 2.20 and a low of 2.00, so the vertical is labeled along the vertical from 2.00 to 2.20.
Determine whether the stock closed higher or lower than it opened. If the opening price is higher than the closing price, you'll use a red marker. If the opening price is lower than the closing price, you'll use a blue marker. If the stock opened and closed at the same price, you'll use a black marker. Using the right color marker, place a dot at the low price for the day.
Place a second blue dot at the high price for the day. Connect the two dots with a thin line. This is the 'wick' of the candle.
Find the opening price for the day and mark a horizontal line across the wick at that point. Do the same with the closing price.
Draw a thick blue line between the two horizontal marks to create the candle body. That's the complete candlestick.
Take some time to get familiar with the anatomy of the candlestick you just drew. There's a lot more information in that little symbol than you think. The color tells you whether the stock traded up or down over the course of the day. The length of the entire candle from wick top to wick bottom tells you the entire range of trading for the day. The length of the body tells you how much the stock moved from the starting bell to the closing bell. The length of the wick on either end can suggest the tenor of the market trading. For instance, a long top wick on a short candle body suggests a bullish push that was rejected by traders, while a long top wick on a long candle body suggests that the market pushed back against a bullish rise but couldn't force prices back down to the opening price.

How to Choose Stock Charting Software

Learn how to read stock charts. Some software has built-in alerts that make it super-simple to play the stock market. Others have less bells and whistles and more tracking power; some of these may rely solely on graphs to let you know what's going on. Many types of software will assume that you already know how to read stock charts.
Pick your preferred software version. Do you want the free online version, or would you rather pay for something with a little more muscle? Many first-time stock market players prefer to get their stock charting software for free during their learning period. Bigcharts.com and Stockcharts.com are just two examples of reliable sites that will get you up and running in no time.
Customize your chart to fit your needs. No matter which model you choose, a good chart will have lots of menus and tabs to help you tailor the program to your exact needs. Take advantage of this tool to make sure that you are getting the most out of your stock charting software. Your chart will let you select specific stocks to track and pick a time frame for each one (weekly, daily, hourly, etc.) You can also change the colors on everything in the chart to make it easier for you to follow. You can modify the way the chart presents itself (do you want a bar graph or a line graph?) and many other things.
Use the extras. If you think you need more information, the stock charting software will have every imaginable option. You can track several aspects of your stock on the same graph, follow its performance history, set up alerts and indicators to predict its future direction, and get live streaming quotes from your broker.
Last but not least, it's important to learn how to read all of this information in order to make your pick. And thanks to the user-friendly stock charting software that is now widely available to so many people worldwide, before you know it you too will be playing the stock market like a pro!
While you're here be sure to take a look around for more tips and information about the stock market.