How to read candlestick charts

A candlestick packs four prices into one mark. This guide explains those four prices, the shape of the candle and the questions to ask before reading a chart.

Each candlestick represents one period: a day, a week or a shorter interval such as two hours. The chart on this site lets you switch between 2H, 1D and 1W views, and every candle is built from the same four inputs.

The four prices

• Open — the first traded price in the period.
• High — the highest price reached during the period.
• Low — the lowest price reached during the period.
• Close — the last traded price in the period.

The body connects the open and the close. When the close is above the open, the body is often drawn in one color; when the close is below the open, it is drawn in another. The thin lines above and below the body are the wicks. A long upper wick means price traded above the body but did not finish there; a long lower wick means the opposite.

What the shape tells you

A large body can suggest a decisive move during the period. A small body can suggest indecision. A candle with a very small body and long wicks is often called a doji: the period opened and closed at similar levels even though price moved around inside the range. A hammer has a small body near the top and a long lower wick, showing that the low was rejected before the close.

These names describe price action; they are not predictions. The same shape can appear in different contexts and be followed by very different outcomes. Experienced chart readers consider the surrounding trend, the level price is testing and the timeframe before interpreting a single candle.

Context matters more than any one bar

A daily candle carries more information than a two-hour candle because it summarises a full session. The same pattern that looks dramatic on a 2H chart may be a small pause on a daily chart. Keeping the full history available makes it easier to zoom out and compare.

Volume is another context clue. A large body on unusually high volume may describe a more meaningful repricing than a large body on quiet volume. Charts that show OHLCV data let you inspect both price and participation.

Delayed data and chart reading

The candles here are delayed by at least 24 hours. That is fine for studying structure, but it means the chart is a historical record rather than an execution tool. Use it to learn how markets move and to build a repeatable observation routine, not to chase a price in real time.