How to read a candlestick

What one candle shows

A candlestick chart splits time into equal periods (one minute, one hour, one day) and draws one candle for each. Every candle records four prices for its period:

• Open: the first traded price.
• High: the highest price reached.
• Low: the lowest price reached.
• Close: the last traded price.

Together these are often shortened to OHLC.

Body and wicks

The body is the thick part. It runs from the open to the close. The thin lines above and below it are the wicks (also called shadows), and they reach to the high and the low.

If the close is above the open, the candle is bullish: price finished the period higher than it started. On this site bullish candles are green. If the close is below the open, the candle is bearish and drawn in red. Some platforms use other colours or hollow bodies, but the idea is the same.

Reading what happened

A candle is a short summary of a contest between buyers and sellers.

• Long body, short wicks. One side was in control from start to finish.
• Small body, long wicks on both sides. Price moved a lot both ways but ended near where it started. Neither side won the period.
• Long upper wick. Buyers pushed price up, but sellers pushed it back before the close. Higher prices were rejected.
• Long lower wick. Sellers pushed price down, but buyers brought it back. Lower prices were rejected.

Why the close matters most

The close is the price the period settled on. That is why chart patterns are confirmed on a candle close, not on a wick poking through a level. Until the period ends, the live candle can still change completely: a candle that looks like a strong breakout halfway through can close back inside the range.

Crypto trades around the clock, so the daily close is set by the platform. Most exchanges and charting sites close the daily candle at 00:00 UTC.

One candle is not a signal

A single candle says little on its own. A long lower wick at a level where price has turned up several times means more than the same wick in the middle of nowhere. Read candles in context: the trend they sit in, the levels nearby and the volume behind them. The next lessons cover each of those.