Reading candlesticks | Understanding price charts

Each candlestick summarises four prices for one chosen period: open, high, low and close.

The idea

The candle body spans the opening and closing prices. The wicks show the highest and lowest prices reached during the period. A candle that closes above its open is often shown in one colour, while a candle that closes below its open is shown in another. Colours vary by platform, so check the chart settings.

Apply the idea

Suppose a candle opens at $100, reaches $105, falls to $98 and closes at $103. Its body runs from $100 to $103 and its wicks reach $98 and $105. It closed above its open, even though price moved both higher and lower during the period. The candle alone does not explain why those moves happened.

Key takeaway

Read the open, high, low and close together. One candle is only one part of the surrounding price history.