A candlestick shows four prices for its period: the open and close form the thick body, and the high and low form the thin wicks. A candle closing above its open is bullish; one closing below is bearish. That single shape tells you the balance between buyers and sellers at a glance.
Key takeaways
- Each candle packs four prices: open and close form the body, high and low form the wicks.
- A close above the open is bullish (green); below is bearish (red); a taller body means one side controlled the period more decisively.
- Wicks show rejected extremes and tell the real story - but read candles in context (trend and level first), and backtest any candlestick pattern before trusting it.
The four prices
- Open - the price when the period began.
- Close - the price when it ended.
- High - the highest price reached.
- Low - the lowest price reached.
The body spans open to close; the wicks reach out to the high and low. This is the same OHLC data that lives in the historical CSV files you can backtest with.
Bullish and bearish candles
If the close is above the open, buyers won the period - a bullish candle, usually green. If the close is below the open, sellers won - a bearish candle, usually red. The taller the body, the more decisively one side controlled that period.
What the wicks tell you
Wicks are where the story lives. A long upper wick means price pushed up but got sold back down before the close - buyers tried and failed. A long lower wick is the reverse. Wicks at key levels often mark where one side lost control, which is why traders watch them for momentum shifts.
Important: a candle pattern is a hint, not a signal on its own. The same shape means very different things at a major level versus in the middle of nowhere. Read candles in context - trend and level first, pattern second.
Test whether a pattern actually pays
Candlestick folklore is full of patterns that sound convincing and perform poorly. Rather than trusting a name, prove it with data: backtest a set of trades that trigger on the pattern and check the expectancy. Replaying charts candle by candle also trains your eye to read them in real time, with the next candle hidden - the way live trading actually feels.
Candlestick FAQ
How do you read a candlestick?
The open and close form the body; the high and low form the wicks. A close above the open is bullish (often green); a close below is bearish (often red).
What do the wicks on a candle mean?
They show extremes that did not hold. A long upper wick means buyers pushed up but sellers forced price back down before the close, hinting at rejection.
Are candlestick patterns reliable?
They are hints, not guarantees, and work best in context at a real level and with the trend. Backtest patterns you rely on rather than trusting folklore.
What is the difference between a candlestick and a bar chart?
Both show the same open, high, low, and close. A bar marks open and close as ticks on a vertical line; a candle fills the open-to-close range as a colored body, making buyer-seller balance easier to read at a glance.