Candlestick charts are the most common way traders read price. Once you know what a candle shows, a chart goes from a wall of shapes to a clear story of what buyers and sellers are doing.
What one candle shows
Each candle covers a period of time (a minute, an hour, a day, whatever timeframe you choose) and shows four prices: the open, the close, the high and the low. The body is the range between open and close; the thin lines above and below (the wicks) mark the high and low.
Reading colour and shape
- A rising candle (often green) closes higher than it opened, buyers were in control.
- A falling candle (often red) closes lower than it opened, sellers were in control.
- A long body shows strong momentum; a short body shows indecision.
- Long wicks show prices were pushed to an extreme, then rejected.
Why timeframe matters
The same market looks different on different timeframes. A one-minute chart shows short-term noise; a daily chart shows the bigger trend. Beginners often start on higher timeframes, they’re calmer and the signals are clearer.
Putting it together
Read candles in context, alongside the trend and levels of support and resistance, rather than in isolation. One candle is a clue; a sequence of them tells the story. Practise on a demo chart until it becomes second nature.
- Each candle shows the open, high, low and close of a period
- Body = open-to-close; wicks = the high and low
- Colour shows who won the period, buyers or sellers
- Read candles in context and practise on higher timeframes
This guide is educational only and is not investment advice or a promise of profit. Trading involves significant risk and may result in the loss of your capital.