The Anatomy of a Candlestick
Every chart you'll ever read starts with this single shape. Here's what each part of a candlestick actually tells you.
A candlestick is the most information-dense single shape in financial markets. In one glyph it tells you four numbers — open, high, low, close — and one direction. Learning to read it fluently is the prerequisite for everything that follows.
The four prices
The body of the candle spans open to close. The wicks (or shadows) extend up to the high and down to the low of the period. Colour conventionally indicates direction: filled / red for close below open, hollow / green for close above open. The period itself — 1 minute, 1 hour, 1 day — is set by your chart timeframe.
Why the body matters more than the wicks
A long body indicates strong directional conviction during the period. Long wicks with small bodies (think doji, hammer, shooting star) indicate indecision or rejection — price went somewhere, but didn't close there. Most readable price action is in the relationship between bodies and wicks across several candles in sequence.
Three patterns worth memorising first
- Pin bar — small body, long wick on one side. Price tested a level and got rejected.
- Engulfing — second candle's body fully covers the first. A potential reversal signal.
- Doji — open and close roughly equal. Indecision; needs confirmation.
Don't learn 47 patterns. Learn these three deeply, then layer context (where on the chart, what timeframe, what's the broader trend) over the top.