Candlestick Basics: Anatomy of a Candle

Candlesticks are the most widely used charting method in trading. Each candlestick tells a story: where the market opened, where it closed, and how far prices moved within that time period. Mastering candlestick basics is the first step in understanding price action.

A candlestick packs open, close, high, and low into a single shape.

What Is a Candlestick?

A candlestick shows how a stock, index, or asset traded during a specific time period (e.g., 1 minute, 1 day, 1 week). The candlestick body and wicks reveal the market’s sentiment at a glance.

• ✔️ Opening price
• ✔️ Closing price
• ✔️ High price
• ✔️ Low price

Candlestick chart showing multiple candles over time.

Candle Anatomy: Body

The body of a candlestick represents the distance between the opening and closing price. Its color shows whether the price rose or fell.

• Top of body = Close (if bullish) / Open (if bearish)
• Bottom of body = Open (if bullish) / Close (if bearish)

The body shows the difference between open and close prices.

Candle Anatomy: Wicks (Shadows)

The wicks (or shadows) extend above and below the body. They represent the full trading range during that period.

• Top wick = highest price reached
• Bottom wick = lowest price reached

The wicks mark the high and low of the trading session.

Bullish vs. Bearish Candles

The color of the candlestick body shows who was in control: buyers (bulls) or sellers (bears).

• Bullish candle (price went UP) = gold/green body
• Bearish candle (price went DOWN) = red/dark body

Bullish vs bearish candlesticks side by side.

Why Candlestick Basics Matter

Understanding candlesticks helps traders quickly gauge market sentiment and spot key reversals or continuation signals. They are the foundation of chart reading and technical analysis.

Every candlestick tells a story about the battle between buyers and sellers.

Conclusion

Candlesticks are the building blocks of technical analysis. Once you understand how to read them, you can interpret market sentiment at a glance. From here, you can explore more advanced candlestick patterns like Doji, Engulfing, Morning Star, and beyond.