How to read a candlestick chart (the basics)
Candlesticks pack four prices into one little shape. Learn to read the body, the wicks and what a candle does — and doesn't — tell you.
Key takeaways
- Each candle shows four prices: open, high, low and close.
- The body is open-to-close; the wicks are the highs and lows.
- No single candle predicts the future — it shows what already happened.
A candlestick chart looks intimidating, but each 'candle' is just a tidy way to show four prices for a slice of time — a minute, an hour, a day. Once you can read one candle, you can read the whole chart.
Anatomy of a single candle
- Open — the price at the start of the period
- Close — the price at the end of the period
- High — the highest price reached
- Low — the lowest price reached
- Body — the thick part, between open and close
- Wicks (or shadows) — the thin lines reaching to the high and low
Note
Usually a green/hollow candle means price closed higher than it opened, and a red/filled candle means it closed lower. Colours are customisable, so always check your platform.
What a candle tells you
A long body means one side (buyers or sellers) clearly won that period. A tiny body with long wicks means the two fought to a draw — price went both ways and ended up near where it started. That's it. You're reading the balance of buyers vs sellers.
- 1
Start on a higher timeframe
Daily or 4-hour candles are far less noisy than 1-minute candles. Beginners drown in the noise of fast charts.
- 2
Read the story, not single candles
Look at whether highs and lows are generally rising or falling, rather than obsessing over one shape.
- 3
Practise live on a demo
Pull up a chart on a demo account and just watch candles form in real time for a while. It clicks fast.
Reality check
Candlestick 'patterns' are descriptions of the past, not crystal balls. They can hint at momentum, but no pattern guarantees the next move. Anyone selling you a 'never-loses' pattern is selling you something.
“The chart tells you what happened. Your risk plan decides what happens to your account.”