Chapters in Market Foundations
Chapter 6 of 6 · 5 min read
How to read a candlestick chart
Open, high, low and close in one shape: the basis of nearly every price chart.
Each candle covers one period, for example one day. The body spans the open to the close; thin wicks show the high and the low. Up candles (green or hollow) closed above the open; down candles closed below.
What a candle tells you
- Long body: strong, one-sided pressure in the period.
- Long upper wick: buyers pushed up but sellers rejected the high.
- Long lower wick: sellers pushed down but buyers absorbed it.
- Tiny body (doji): indecision between buyers and sellers.
Context is everything
A single candle is not a buy or sell signal. Read it with the trend, volume and nearby support or resistance. The same hammer means different things at a 52-week low and in the middle of a range.
Key takeaways
- Body = open to close; wicks = high and low.
- Wicks show rejection; bodies show conviction.
- Use candles with trend and volume, never alone.
Put it into practice
Open the live page on Market Intelligence and see this concept on real data.
Keep learning
- Chart patterns: NR7, inside bars, VCP, double tops and bottoms · Technical Analysis & Trading Tools
- Trend, support and resistance · Technical Analysis & Trading Tools
Education only, not investment advice. Updated 2026-10-09.