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How to Read Candlestick Charts
A plain-language guide to candlestick charts: open, close, high, low, and what the colors mean.
What one candle shows
Each candle summarizes price action over a time period such as one hour or one day. It shows four prices: open, high, low and close.
Body and wicks
The thick body spans the open to the close. The thin lines above and below, called wicks or shadows, show the highest and lowest prices reached. In many charts green means the price closed higher than it opened, and red means it closed lower.
Reading the context
One candle tells you little on its own. Traders look at sequences of candles, trends, support and resistance levels, and trading volume to judge whether buyers or sellers are in control.
Choose a time frame
Short time frames such as 5 minutes are noisy and suit active traders. Daily and weekly charts show the larger trend and are easier for beginners to read.
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