Trading term

What is Candlestick?

A candlestick is a single bar on a price chart that shows four prices for one time period — the open, high, low and close. Its body spans the open-to-close range and thin wicks reach to the high and low, so one glance tells you whether buyers or sellers won the period.

Each candlestick packs a whole period — a day, an hour, five minutes — into one shape. The thick part, the body, runs between the opening price and the closing price. The thin lines above and below, the wicks (or shadows), stretch to the highest and lowest prices touched. Colour tells direction: a green (or hollow) candle closed higher than it opened; a red (or filled) candle closed lower.

The shape is the story. A long body means one side dominated all period; a tiny body — a doji — means buyers and sellers finished in a near-tie. A long lower wick means price was pushed down but buyers hauled it back, a sign of demand. Reading candlesticks is the alphabet of chart reading: every pattern, from a hammer to an engulfing bar, is just candlesticks in sequence.

The anatomy of a candlestick
HighUpper wickCloseBodyOpenLower wickLowBullish — closed upOpenCloseBearish — closed down

The body spans the open-to-close range; the wicks reach the high and low. Green closes above its open (buyers won), red closes below (sellers won).

For example

A candle opens at $100, sells off to $96, rallies to $103, and closes at $102. The body runs $100→$102 (green — buyers won), a lower wick reaches down to $96, and an upper wick pokes up to $103.

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Why it matters to you

Candlesticks are the raw material every other charting tool is built from — support/resistance, trends and patterns are all just candlesticks read in context. Because a single candle encodes the tug-of-war between buyers and sellers, learning to read one is the fastest upgrade to how much a chart tells you: it's the difference between seeing a line and seeing a story.

⚠ Colour isn't the whole signal

Beginners fixate on red-versus-green, but the body-to-wick relationship often matters more. A green candle with a huge upper wick — buyers pushed up but got slammed back — can be more bearish than a small red one. Read the shape, not just the colour.

Frequently asked questions

What do the wicks on a candlestick mean?

The wicks (also called shadows) are the thin lines above and below the body. The top wick reaches the highest price of the period, the bottom wick the lowest. Long wicks show price was rejected from an extreme — a long lower wick means sellers pushed down but buyers bought it back up.

What's the difference between a candlestick and a bar chart?

Both show open, high, low and close. A bar chart uses a vertical line with small ticks for the open (left) and close (right); a candlestick fills the open-to-close range as a coloured body, which makes direction and momentum far easier to read at a glance.

What does a green or red candle mean?

A green (or hollow) candle closed higher than it opened — buyers controlled that period. A red (or filled) candle closed lower than it opened — sellers controlled it. The colour is set by close versus open, not by the previous day's price.

What is a doji candlestick?

A doji is a candle with almost no body — the open and close are nearly equal — leaving a cross or plus shape. It signals indecision: buyers and sellers fought to a draw. After a strong trend, a doji can warn that momentum is stalling.

Related terms

Ascending triangleAn ascending triangle is a bullish continuation pattern: a flat horizontal resistance line on top, with a rising trendline of higher lows beneath it. As the higher lows squeeze price against the ceiling, pressure builds — and it usually resolves with a breakout up through the resistance.ATR (Average True Range)ATR (Average True Range) measures how much a security typically moves in a period — its volatility — as an average of recent trading ranges. It doesn't say which direction price is heading, only how far it tends to travel, which makes it a core tool for stop-losses and position size.Bollinger BandsBollinger Bands wrap a price chart in three lines: a middle moving average with an upper and lower band set two standard deviations away. The bands widen when volatility rises and squeeze together when it falls, framing whether price is relatively high or low.BreakdownA breakdown is when price falls decisively through a support level it had been holding above — the bearish mirror of a breakout. It signals sellers have overwhelmed the buyers defending support, and often triggers a fast move lower as stops and new sellers pile in.
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