How to Read a Candlestick
One candle is four prices drawn as a shape. Learn to read the shape and a wall of them stops looking like noise.
A price chart has to compress a whole period — a day, an hour, a minute — into one mark. A candlestick does it with four numbers: where the price opened, the highest and lowest it traded, and where it closed.
The two parts of every candle
- The body — The thick block between the open and the close. A green body means the close was above the open; a red body means it closed below.
- The wick — The thin line above and below. It marks the high and the low — prices that were reached but did not hold.
The shape carries the story. A long body says one side dominated the whole period. A tiny body with long wicks either side says the two sides fought and neither won. A long lower wick says the price fell and buyers pushed it back up before the close.
What a candle cannot tell you
A candle records what already happened. It carries no information about what happens next, and no single candle is a reason to buy or sell. Reading charts is for understanding the market you are in — not for predicting it.
Timeframe changes everything
The same market drawn in daily candles and in five-minute candles looks like two different markets. Always check which timeframe a chart is on before you draw any conclusion from it.