How to Read a Candlestick Chart

Four prices, drawn as one

A candlestick records the open, high, low and close of a period: the body runs from open to close, and the wicks mark the high and low.

Bullish and bearish candles, and colors

A close above the open makes a bullish candle; the opposite makes a bearish candle. Right now bullish candles are drawn in green and bearish ones in red. The color is only a convention: to tell up from down, check whether the close is above or below the open.

The "tone" of bodies and wicks

A long body means one side pushed from the open all the way to the close; a long wick means price got there but was pushed back. Both are bullish, yet a big bullish candle and a small one with a long upper wick mean very different things.

Two color conventions

Green up, red down is the most common convention in Europe and the US; mainland China (A-shares), Taiwan, Japan and Korea use red for rising prices instead (red up, green down). By default this site follows your interface language, and the color button at the top right (two small candles) switches it any time: charts and explanations across the whole site change with it.

Key takeaways

• The body = open to close; the tips of the upper and lower wicks = the high and low for the period.
• A close above the open is a bullish candle; the reverse is a bearish candle. The colors are just a convention: Europe and the US mostly use green for up and red for down, while mainland China, Taiwan, Japan and Korea mostly use red for up. You can switch at the top right of this site.
• A long body means one side pushed from the open all the way to the close; a long wick means the price got there but was pushed back.
• A candle can cover 1 minute, 1 hour, 1 day… Each one only summarizes that period; you can't see exactly how the price moved inside it.

Try it yourself

You can do these exercises in this lesson's interactive simulation:

1. Switch to "Shape your own," then click "Example: O 10 · H 12 · L 9 · C 11": is it bullish or bearish? How long are the upper and lower wicks?
2. Go back to "Watch it grow" and play the "Spikes up, then falls back" day: at what moment did the upper wick stretch? What color was it at the close?
3. In "Shape your own," drag the "High H" slider down. When it goes below the close, what does the pop-up say? Where does the high end up?
4. Look at the strip at the bottom: what's the difference between drawing the same day's prices as 1 candle and as 4? Then click the color button and look again in the other color convention.

Quiz and explanations

1. A candle opens at 10, has a high of 12 and a low of 9, and closes at 11. It's…

Answer: A bullish candle with a 1-point upper wick and a 1-point lower wick.Close > open makes it bullish; the upper wick is 12 − 11 = 1 and the lower wick is 10 − 9 = 1.

2. What does a candle's "body" represent?

Answer: Open to close.The wicks are what show the high and low.

3. A candle opens at 20, has a high of 25 and a low of 19.8, and closes at 20.3. What's its most notable feature?

Answer: A long upper wick: the price spiked and was knocked back by sellers.The upper wick is 25 − 20.3 = 4.7, far bigger than the 0.3 body and the 0.2 lower wick. It closed above the open, so it's a small bullish candle with a long upper wick.

Terms in this lesson

• bearish candle (Bearish Candle): A candle that closes below its open (the price went down). Its color depends on the color scheme: red when green means up, green when red means up.
• bullish candle (Bullish Candle): A candle that closes above its open (the price went up). Its color depends on the color scheme: green when green means up, red when red means up.
• body (Body): The part of a candle between the open and the close; the longer the body, the more one side dominated.
• candlestick (Candlestick): A chart shape whose body and wicks show the open, high, low and close for a period of time.
• OHLC: Open, High, Low, Close: the four prices of a period.
• timeframe (Timeframe): How much time each candle covers, such as 5 minutes, 1 hour, a day or a week.
• wick (Wick / Shadow): The thin lines sticking out above and below the body, reaching the high and the low.