How to Read Candlestick Charts

Candlestick charts are the most common way traders visualize price, because a single candle packs four pieces of information — open, high, low, and close — into one easy-to-read shape. Learn to read one candle and you can read a whole chart.

Anatomy of a candle

Each candle covers a fixed time period (one minute, one hour, one day — whatever timeframe you choose). The thick part is the body, drawn between the open and close. The thin lines above and below are the wicks (or shadows), marking the highest and lowest prices reached during that period. A candle that closes higher than it opened is usually shown in one colour; one that closes lower in another.

What the shape tells you

A long body means one side dominated — strong buying or strong selling. A small body with long wicks signals indecision: price travelled far in both directions but settled near where it started. A candle with a long lower wick and small body near the top suggests buyers stepped in after a dip, which is why these shapes often appear near areas of support.

Reading candles in context

No single candle is a trading signal on its own. Their value comes from context — where they form relative to a trend, and whether they cluster near support or resistance. Pair this with support and resistance and a couple of technical indicators, and practise spotting patterns on a free demo account before risking real capital.