How to Read a Candlestick Chart: The Basics
What one candle shows
Each candle shows price action for one period, such as one day or one hour. It records four prices: the open, the high, the low and the close.
Body and wick
The thick part is the body. It runs from the open to the close. The thin lines above and below are the wicks, also called shadows. They show how far price went beyond the body during that period.
Colours
Most charts colour a candle green when the close is above the open, and red when the close is below the open. Colours can be changed in your chart settings, so always check what your platform uses.
Reading a few candles together
One candle says little. Look at a group of candles to see whether price is rising, falling or moving sideways, and how strong each push was. A long body means price moved a lot in that period. A long wick means price went far but came back.
Common mistakes
Treating one candle as a sure signal. Ignoring the time frame. Forgetting that a pattern that worked before can fail.
Key points
- A candle shows open, high, low and close.
- Body and wick tell different parts of the story.
- Read candles in groups, not alone.
- No pattern is a guarantee.
Trading involves risk. This article is for education and information only. It is not investment advice, and no course or method promises a return or removes the risk of loss.