ZMT Academy · Learn the foundations

Free Forex Education

Build your market vocabulary, one idea at a time.

Five short lessons introduce currency quotes, chart language, market influences, and risk. This page is general education only; it contains no trade signals or promises.

Begin with lesson 01Five ordered beginner lessons

The learning path

Five lessons. A clear place to begin.

Each visual introduces one market idea, followed by a short explanation.

  1. 01

    Beginner lesson 01

    What Is Forex?

    Forex is the exchange of one currency for another.

    One common spot-market structure
    Banks & dealers
    Businesses
    Funds & individuals
    OTC spot market
    SELL / BUYEURCurrency exchanged
    QUOTE VALUEUSDValue shown in the quote

    Currency futures and options can trade on regulated exchanges.

    A price compares two currencies

    A pair such as EUR/USD shows how many U.S. dollars are quoted for one euro. Buying or selling the pair involves exchanging one currency against the other.

    A global market with different venues

    Banks, dealers, businesses, funds, and individuals exchange currencies through different venues. Much retail spot Forex is over the counter (OTC), arranged through dealer counterparties rather than one central exchange; currency futures and options can trade on regulated exchanges. People exchange currencies for payments, hedging, or speculation, depending on the product.

    Keep in mindFirst identify the two currencies in a quote. A market explanation does not predict the next price.

    Review what you’ve covered

    Knowledge Check — Questions & Answers

    1. What does the Forex market exchange?
    2. What does EUR/USD compare?
    3. Who can participate in the Forex market?
  2. 02

    Beginner lesson 02

    Currency Pairs

    Read the base, quote, bid, ask, and spread in EUR/USD.

    Read from left to right
    EURBASE CURRENCYOne unit being priced
    USDQUOTE CURRENCYCurrency used to show value
    BID · dealer buys EUR1.0800
    ASK · dealer sells EUR1.0802
    SPREAD  0.0002 · 2 pips

    Illustrative quote only — not a live price. Costs and display conventions vary.

    Base currency and quote currency

    In EUR/USD, EUR is the base currency and USD is the quote currency. An illustrative quote of 1.0800 means one euro is quoted as 1.0800 U.S. dollars.

    Bid, ask, and spread

    A dealer’s bid is the price at which it buys the base currency; its ask is the price at which it sells the base currency. The ask minus the bid is the spread. Display conventions and other costs vary by provider.

    Keep in mindIllustrative only: bid 1.0800 and ask 1.0802 gives a 0.0002 spread, or 2 pips for this non-JPY pair. This is not a live price.

    Review what you’ve covered

    Knowledge Check — Questions & Answers

    1. In EUR/USD, which currency is the base currency?
    2. What does a dealer’s bid show in this lesson?
    3. How do you calculate the spread?
  3. 03

    Beginner lesson 03

    Candlesticks

    See how one candle summarizes price activity over a chosen interval.

    One candle · one selected time interval
    Bullish close
    HIGHCLOSEOPENLOW

    Close is above open

    Bearish close
    HIGHOPENCLOSELOW

    Close is below open

    Body · open to closeUpper wick · body to highLower wick · body to low

    Open, high, low, and close

    Each candle commonly records the open, high, low, and close for a selected time interval. A bullish candle closes above its open; a bearish candle closes below its open.

    Body and wicks

    The body spans open to close. The upper wick reaches from the body to the high; the lower wick reaches from the body to the low. Platform colors and candle conventions can differ.

    Keep in mindCandles describe historical prices. Check the interval and chart settings before interpreting one.

    Review what you’ve covered

    Knowledge Check — Questions & Answers

    1. What four prices does a candlestick commonly record?
    2. What does the candle body represent?
    3. What do the upper and lower wicks show?
  4. 04

    Beginner lesson 04

    Why Prices Move

    Many changing conditions can influence an exchange rate.

    Several forces can shape expectations
    01Economic newsReleases and policy updates
    02Interest ratesCurrent rates and expectations
    03InflationChanging price levels
    04SentimentHow participants view risk
    05Supply & demandOrders to exchange currencies
    Changing expectationsCurrency prices may move

    Possible influences, not a formula or a guaranteed direction.

    Possible influences

    Economic news, interest rates, inflation, market sentiment, and supply and demand can all affect currency prices. Traders may respond to expectations as well as published outcomes.

    Influence is not certainty

    A release may already be reflected in a price, be interpreted differently than expected, or be outweighed by other information. There is no single factor that reliably explains every move.

    Keep in mindDescribe these factors as possible influences—not as causes that guarantee a particular direction.

    Review what you’ve covered

    Knowledge Check — Questions & Answers

    1. Name two conditions that may influence currency prices.
    2. Does an economic release guarantee a price direction?
    3. Why can’t one factor explain every market move?
  5. 05

    Beginner lesson 05

    Leverage and Risk Management

    Understand how position exposure, order levels, and costs interact.

    Illustrative math · not a trade recommendation
    AssumptionsUSD accountEUR/USD near 1.0000Costs excluded
    EXAMPLE DEPOSIT$1,000
    ILLUSTRATIVE LEVERAGE10:1
    EXPOSURE$10,000
    MICRO LOT1,000 units
    MINI LOT10,000 units
    STANDARD LOT100,000 units
    1 micro lot≈ $0.10 / pip× 20 pips≈ $2

    Stop-loss aims to exit after an adverse move. Take-profit aims to exit at a chosen level. Neither guarantees an execution price.

    Approximate example before spread, fees, or slippage. Lot conventions and product terms vary.

    Leverage and lot sizes

    Leverage lets a smaller margin support larger market exposure and magnifies losses as well as gains. In a common spot-Forex convention, a standard lot is 100,000 units, a mini lot 10,000, and a micro lot 1,000; provider and product conventions vary.

    Stop-loss and take-profit orders

    A stop-loss aims to close a position after an adverse move; a take-profit aims to close it at a chosen favorable level. Gaps, slippage, liquidity, fees, and product terms can change execution and final results.

    Keep in mindIllustrative arithmetic only: on EUR/USD near 1.0000, one 1,000-EUR micro lot is about $0.10 per pip. A 20-pip move is about $2 before spread, fees, or slippage. This is not a recommended trade size.

    Review what you’ve covered

    Knowledge Check — Questions & Answers

    1. How can leverage affect market exposure and losses?
    2. Does a stop-loss guarantee execution at its chosen price?
    3. Which execution costs can affect a trade’s result?

A separate chart reference

ZMT ACADEMY — BEGINNER'S CANDLESTICK BIBLE

This concise beginner reference introduces candle anatomy, pressure, pattern context, and confirmation. It does not reproduce or replace the full advanced Bible reserved for verified paying Academy students. Every example is educational; no pattern guarantees market direction.

01

Candlestick basics

A candlestick summarizes the prices shown by a chart for one selected interval. Read its four price points before giving the shape a name.

One candle · one selected time interval
Bullish close
HIGHCLOSEOPENLOW

Close is above open

Bearish close
HIGHOPENCLOSELOW

Close is below open

Body · open to closeUpper wick · body to highLower wick · body to low
Open
The first recorded price in the selected interval.
Close
The last recorded price in the selected interval.
Body
The range between the open and close.
High
The highest recorded price in the interval.
Low
The lowest recorded price in the interval.
Upper wick
The distance from the top of the body to the high.
Lower wick
The distance from the bottom of the body to the low.

If a candle opens at 1.0800 and closes at 1.0810, its body spans those two prices and the candle is bullish for that interval. The high and low can extend beyond the body. These are sample numbers, not a live quote.

02

Bullish vs. bearish candles and buying/selling pressure

Bullish and bearish describe where a candle closed relative to its open. They summarize one interval, not who will control the next one.

Bullish candle

Bullish
Shape example · interval closes matter

The close is above the open. Platform colors vary, so check its legend.

Buyers lifted the close above the opening price during this interval. A larger bullish body than nearby candles can show a strong close during that interval.

Bearish candle

Bearish
Shape example · interval closes matter

The close is below the open. A red candle is common, but not universal.

Sellers pushed the close below the opening price during this interval. A larger bearish body than nearby candles can show a weak close during that interval.

Wicks show prices visited and then left before the interval ended. Candle color, body size, and wick shape are observations; none reveals every order or guarantees what follows.

03

Top 10 bullish patterns

Each classification describes a common chart-reading idea. Review the full shape and its location; no single candle predicts the next move.

Bullish engulfing

Bullish
Shape example · interval closes matter
Appearance
A small bearish candle is followed by a larger bullish real body that covers the previous real body; the wicks do not need to be covered. A bullish example has a second candle whose real body covers the prior bearish body.
What pressure may show
Sellers were in control first, then buyers moved the close above the prior open. The shift may show stronger buying for those intervals.
Most meaningful location
It is most meaningful after a decline, especially near a support zone or a tested swing low.
Confirmation to look for
Wait for the second candle to close, then look for a later close above its high or a hold above the support zone. A close back below the pattern weakens the reading.

Hammer

Bullish
Shape example · interval closes matter
Appearance
A small real body sits near the top of the candle, with a lower wick roughly twice the body or longer and little upper wick.
What pressure may show
Price traded much lower during the interval but recovered toward the open. Buyers absorbed some selling pressure; the close alone does not prove a reversal. A hammer after a decline is one historical formation traders may study for a possible reversal.
Most meaningful location
After a decline near support, where the lower-price test can be compared with a visible prior floor.
Confirmation to look for
Look for a later candle to close above the hammer high and for the support area to hold. A break below the wick low is contrary evidence.

Piercing line

Bullish
Shape example · interval closes matter
Appearance
After a long bearish candle, a bullish candle opens lower and closes above the midpoint of the first body, without fully covering it.
What pressure may show
The lower start shows sellers still pressing, while the recovery through the prior body midpoint may show buyers regaining ground.
Most meaningful location
After a decline near support or a prior swing low.
Confirmation to look for
Look for a later close above the second candle high and a hold of the support zone; a close below the low weakens the reading.

Morning star

Bullish
Shape example · interval closes matter
Appearance
A long bearish candle is followed by a small pause candle, then a bullish candle that closes well into the first body. A price gap is not required in a continuous FX chart.
What pressure may show
Selling pressure slows, then buyers recover part of the earlier decline across three intervals.
Most meaningful location
After a sustained decline, especially near a support zone.
Confirmation to look for
Check that the third candle has closed; then look for a later close above its high and support holding.

Three white soldiers

Bullish
Shape example · interval closes matter
Appearance
Three consecutive bullish candles generally open within or near the prior real body and close progressively higher, each near its high. Their bodies are substantial compared with nearby candles.
What pressure may show
Repeated higher closes may show buyers maintaining pressure across several intervals.
Most meaningful location
Near the start of a turn from a base or after support holds; after a long rise the move may already be extended.
Confirmation to look for
Wait for all three candles to close and check that a later pullback holds above the sequence’s starting area.

Bullish harami

Bullish
Shape example · interval closes matter
Appearance
A small body forms inside the real body of the preceding long bearish candle; the second candle can close either way.
What pressure may show
The smaller second body may show selling pressure easing, but it does not show buyers have taken control yet.
Most meaningful location
After a decline near a support zone or prior low.
Confirmation to look for
Look for a later close above the first candle high; a break below the pattern low argues against the reversal reading.

Tweezer bottom

Bullish
Shape example · interval closes matter
Appearance
Two candles test nearly the same low; the first is often bearish and the second often bullish.
What pressure may show
Repeated rejection near one price may show sellers struggling to push through while buyers respond there.
Most meaningful location
After a decline where the shared low aligns with a prior support zone.
Confirmation to look for
Check that the second candle closes and look for a later close above the pair’s intervening high.

Inverted hammer

Bullish
Shape example · interval closes matter
Appearance
A small body sits near the bottom of the range with a long upper wick and little lower wick, similar in shape to a shooting star.
What pressure may show
Buyers pushed price higher during the interval, but sellers pulled it back. The attempt is only a possible change in pressure until later candles respond. The name depends on its location after a decline.
Most meaningful location
After a decline near a support zone; in an uptrend the same shape is not automatically an inverted-hammer reversal.
Confirmation to look for
Look for a later close above the candle high and evidence that the support zone holds.

Rising three methods

Bullish
Shape example · interval closes matter
Appearance
In an uptrend, a long bullish candle is followed by usually three smaller bearish candles contained within its high-to-low range, then a bullish candle closes above the first candle’s close.
What pressure may show
A pause lets sellers push back modestly, while the closing candle may show buyers resuming the prior advance.
Most meaningful location
During an established uptrend after a contained pullback, not after a major break in structure.
Confirmation to look for
After the fifth candle closes, look for follow-through above its high and check that price holds the prior trend structure. A close back into the pause range weakens the continuation reading.

Bullish marubozu

Bullish
Shape example · interval closes matter
Appearance
A long bullish body has very small or no visible wicks, opening near the low and closing near the high.
What pressure may show
Buyers kept the close near the interval high. Compare it with neighboring candles; a long body can also reflect unusually high volatility.
Most meaningful location
At a confirmed break above resistance or after support holds, with the broader trend in view.
Confirmation to look for
Wait for the candle to close and check whether price holds above the broken zone or the candle midpoint. A return below resistance weakens the reading.
04

Top 10 bearish patterns

Each classification describes a common chart-reading idea. Review the full shape and its location; no single candle predicts the next move.

Bearish engulfing

Bearish
Shape example · interval closes matter
Appearance
A small bullish candle is followed by a larger bearish real body that covers the previous real body; the wicks do not need to be covered. A bearish example has a second candle whose real body covers the prior bullish body.
What pressure may show
Buyers were in control first, then sellers moved the close below the prior open. The shift may show stronger selling for those intervals.
Most meaningful location
It is most meaningful after a rise, particularly near resistance or a prior swing high.
Confirmation to look for
Wait for the second candle to close, then look for a later close below its low or rejection at resistance. A close back above the pattern weakens the reading.

Shooting star

Bearish
Shape example · interval closes matter
Appearance
A small real body sits near the bottom of the candle, with a long upper wick and little lower wick.
What pressure may show
Price traded much higher but fell back toward the open. Sellers rejected part of the advance; the shape does not prove a top. A shooting star after an advance is one historical formation traders may study for a possible reversal.
Most meaningful location
After a rise near resistance or a prior swing high, where the upper-price test meets a visible ceiling.
Confirmation to look for
Look for a later close below the shooting-star low and rejection at resistance. A close above the wick high is contrary evidence.

Dark cloud cover

Bearish
Shape example · interval closes matter
Appearance
After a long bullish candle, a bearish candle opens higher and closes below the midpoint of the first body, without fully covering it.
What pressure may show
The higher start shows buyers still pressing, while the close back through the prior body may show sellers taking ground.
Most meaningful location
After an advance near resistance or a prior swing high.
Confirmation to look for
Look for a later close below the second candle low and rejection at resistance; a close above the high weakens the reading.

Evening star

Bearish
Shape example · interval closes matter
Appearance
A long bullish candle is followed by a small pause candle, then a bearish candle that closes well into the first body. A gap is not required in a continuous FX chart.
What pressure may show
Buying pressure slows, then sellers recover part of the earlier advance across three intervals.
Most meaningful location
After a sustained rise, particularly near resistance or a prior swing high.
Confirmation to look for
Check that the third candle has closed; then look for a later close below its low and resistance holding.

Three black crows

Bearish
Shape example · interval closes matter
Appearance
Three consecutive bearish candles generally open within or near the prior real body and close progressively lower, each near its low. Their bodies are substantial compared with nearby candles.
What pressure may show
Repeated lower closes may show sellers maintaining pressure across several intervals.
Most meaningful location
Near the start of a turn from a high or after resistance holds; after a long decline the move may already be extended.
Confirmation to look for
Wait for all three candles to close and check whether a later bounce fails below the sequence’s starting area.

Bearish harami

Bearish
Shape example · interval closes matter
Appearance
A small body forms inside the real body of the preceding long bullish candle; the second candle can close either way.
What pressure may show
The smaller second body may show buying pressure easing, but it does not show sellers have taken control yet.
Most meaningful location
After an advance near resistance or a prior high.
Confirmation to look for
Look for a later close below the first candle low; a break above the pattern high argues against the reversal reading.

Tweezer top

Bearish
Shape example · interval closes matter
Appearance
Two candles test nearly the same high; the first is often bullish and the second often bearish.
What pressure may show
Repeated rejection near one price may show buyers struggling to move through while sellers respond there.
Most meaningful location
After an advance where the shared high aligns with a prior resistance zone.
Confirmation to look for
Check that the second candle closes and look for a later close below the pair’s intervening low.

Hanging man

Bearish
Shape example · interval closes matter
Appearance
A small body sits near the top of the candle with a long lower wick and little upper wick, matching the hammer shape.
What pressure may show
Sellers pushed price lower before buyers recovered some ground. After a rise, that selling excursion can warn that buying pressure is less one-sided, but the candle is not a reversal by itself.
Most meaningful location
After an advance near resistance or an extended swing high; the same shape after a decline is read differently.
Confirmation to look for
Look for a later close below the hanging-man low and a failure to hold the nearby support area.

Falling three methods

Bearish
Shape example · interval closes matter
Appearance
In a downtrend, a long bearish candle is followed by usually three smaller bullish candles contained within its high-to-low range, then a bearish candle closes below the first candle’s close.
What pressure may show
A pause lets buyers push back modestly, while the closing candle may show sellers resuming the prior decline.
Most meaningful location
During an established downtrend after a contained bounce, not after a major break in structure.
Confirmation to look for
After the fifth candle closes, look for follow-through below its low and check that price holds the prior trend structure. A close back into the pause range weakens the continuation reading.

Bearish marubozu

Bearish
Shape example · interval closes matter
Appearance
A long bearish body has very small or no visible wicks, opening near the high and closing near the low.
What pressure may show
Sellers kept the close near the interval low. Compare it with neighboring candles; a long body can also reflect unusually high volatility.
Most meaningful location
At a confirmed break below support or after resistance holds, with the broader trend in view.
Confirmation to look for
Wait for the candle to close and check whether price holds below the broken zone or the candle midpoint. A return above support weakens the reading.
05

Bullish and bearish engulfing patterns

Engulfing compares two real bodies. The context around the pair matters as much as the shape.

Bullish engulfing

Bullish
Shape example · interval closes matter
Appearance
A small bearish candle is followed by a larger bullish real body that covers the previous real body; the wicks do not need to be covered. A bullish example has a second candle whose real body covers the prior bearish body.
What pressure may show
Sellers were in control first, then buyers moved the close above the prior open. The shift may show stronger buying for those intervals.
Most meaningful location
It is most meaningful after a decline, especially near a support zone or a tested swing low.
Confirmation to look for
Wait for the second candle to close, then look for a later close above its high or a hold above the support zone. A close back below the pattern weakens the reading.

Bearish engulfing

Bearish
Shape example · interval closes matter
Appearance
A small bullish candle is followed by a larger bearish real body that covers the previous real body; the wicks do not need to be covered. A bearish example has a second candle whose real body covers the prior bullish body.
What pressure may show
Buyers were in control first, then sellers moved the close below the prior open. The shift may show stronger selling for those intervals.
Most meaningful location
It is most meaningful after a rise, particularly near resistance or a prior swing high.
Confirmation to look for
Wait for the second candle to close, then look for a later close below its low or rejection at resistance. A close back above the pattern weakens the reading.
06

Reversal and indecision patterns

A reversal label describes a possibility after a prior move. Doji and spinning top are neutral until later price action adds context.

Hammer

Bullish
Shape example · interval closes matter
Appearance
A small real body sits near the top of the candle, with a lower wick roughly twice the body or longer and little upper wick.
What pressure may show
Price traded much lower during the interval but recovered toward the open. Buyers absorbed some selling pressure; the close alone does not prove a reversal. A hammer after a decline is one historical formation traders may study for a possible reversal.
Most meaningful location
After a decline near support, where the lower-price test can be compared with a visible prior floor.
Confirmation to look for
Look for a later candle to close above the hammer high and for the support area to hold. A break below the wick low is contrary evidence.

Shooting star

Bearish
Shape example · interval closes matter
Appearance
A small real body sits near the bottom of the candle, with a long upper wick and little lower wick.
What pressure may show
Price traded much higher but fell back toward the open. Sellers rejected part of the advance; the shape does not prove a top. A shooting star after an advance is one historical formation traders may study for a possible reversal.
Most meaningful location
After a rise near resistance or a prior swing high, where the upper-price test meets a visible ceiling.
Confirmation to look for
Look for a later close below the shooting-star low and rejection at resistance. A close above the wick high is contrary evidence.

Doji

Neutral
Shape example · interval closes matter
Appearance
The open and close are at or very near one another, leaving a very small body; the upper and lower wicks can vary.
What pressure may show
Neither side kept a clear closing advantage for that interval. A doji may mark a pause or balance, not a bullish or bearish result by itself.
Most meaningful location
After a strong move or at a watched support or resistance zone, where a pause may be more noticeable.
Confirmation to look for
Wait for a later candle to close beyond the doji range and read that close with the trend and nearby level. A doji alone is not confirmation.

Spinning top

Neutral
Shape example · interval closes matter
Appearance
A short real body sits between upper and lower wicks that are both visible, often of similar length.
What pressure may show
Price moved both ways but finished near its open, suggesting two-sided pressure and limited closing conviction.
Most meaningful location
After a sustained advance or decline, or near a support or resistance zone, as a sign to examine the next close.
Confirmation to look for
Look for a later close outside the spinning-top range and check whether the nearby level holds. The small body alone gives no direction.
07

Why location matters around support, resistance, and trends

Support and resistance are zones where price previously paused or turned; they are not exact walls. A trend is a sequence of swing highs and lows, not a label supplied by one candle.

At support after a decline

support is a zone, not a line
Sample context
Sample chart: EUR/USD falls toward a prior floor and prints a hammer-like candle with a long lower wick.
How context changes the reading
The wick shows that lower prices were visited and the close recovered. At support, that may be a rejection worth studying; the same shape in the middle of a range says less.
What to check next
Wait for a later close above the candle high and see whether the support zone holds. A close below the zone is contrary evidence.

At resistance after a rise

resistance is a zone, not a line
Sample context
Sample chart: price climbs into a prior ceiling and leaves a long upper wick before closing lower.
How context changes the reading
The upper wick records an advance that did not hold to the close. Near resistance, it may show sellers responding; away from resistance it is only a wick.
What to check next
Look for a later close below the candle low and a failure to reclaim the resistance zone. A close above the zone weakens that reading.

With the trend or against it

Swing structure
Sample context
Sample chart: an uptrend pulls back toward a prior swing low, pauses, then forms a bullish pattern. The same pattern can appear against a strong decline.
How context changes the reading
A pattern that agrees with a visible trend and level may fit the context better than a countertrend shape, but neither guarantees continuation or reversal.
What to check next
Compare swing structure, wait for a completed candle beyond the pattern range, and check whether the nearby level holds. If price breaks the level, revise the interpretation.
08

10-question beginner knowledge check

Choose “Reveal Answer” when you are ready. Each answer stays hidden until its own control is selected.

  1. 01

    What prices make up a candle’s real body?

  2. 02

    When is a candle bullish?

  3. 03

    What does a lower wick record?

  4. 04

    Does a doji prove that price will reverse?

  5. 05

    What part of the prior candle does an engulfing body cover?

  6. 06

    Where is a hammer most meaningful to study?

  7. 07

    Why wait for a candle to close before classifying its pattern?

  8. 08

    What does a long upper wick near resistance show?

  9. 09

    Does a bullish candle guarantee that buyers will control the next interval?

  10. 10

    What should you compare with a candle pattern before interpreting it?

Forex and leveraged products carry substantial risk. Candlestick patterns are historical observations for education, not trade signals or promised outcomes.

The free education and paid course

This short beginner reference builds chart-reading foundations; it does not copy or replace the full advanced ZMT Candlestick Bible reserved for verified paying students. It is separate from the existing four-week ZMT Forex Beginners Academy, priced at USD $499. Paid lessons and materials, student access, progress, enrollment, and checkout remain unchanged.

View the existing Academy course

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