Candle anatomy

A candlestick condenses the four prices of your chosen time slice — open, close, high and low — into a single shape. The thick part between the open and the close is the body; the thin lines extending above and below it are the wicks. If the close is above the open, the candle is a bullish candle and is usually drawn green; if the close is below the open, it is a bearish candle, usually red. The tip of the upper wick marks the highest price of the period, the tip of the lower wick the lowest. Reading a candle on a chart means locating those four points first: the two ends of the body and the two ends of the wicks. The common misreading is to look at one candle and believe it reveals who was buying, who was selling or what the next candle will do. A candle summarises its own period and nothing more; it becomes a story only when read together with the candles around it. Risk literacy starts with that modesty: one shape, one period — nothing beyond.

This content is educational information, not personalised investment advice. The chart examples are illustrative.

Back to the glossary