Candlestick Basics: What Green and Red Candles Tell You
Candlesticks look like little bars with strings poking out the top and bottom. Each one is a compact summary of a single period of trading — and once you can read one, you can read a whole chart.
The four numbers in every candle
A single candle captures four prices for its time period (a minute, an hour, a day — whatever the chart is set to):
- Open — the price when the period started.
- Close — the price when it ended.
- High — the highest price reached.
- Low — the lowest price reached.
Body and wicks
The thick middle part is the body — it stretches between the open and the close. The thin lines above and below are the wicks (or "shadows") — they reach up to the high and down to the low.
- A long body means price moved a lot between open and close — strong momentum that period.
- A small body means it opened and closed near the same spot — indecision.
- A long wick means price pushed to an extreme and then got rejected back. A long lower wick, for instance, means sellers pushed it down but buyers shoved it back up before the close.
Green vs. red
Color just tells you the direction within that period:
- Green (or white) — the close was higher than the open. Buyers won that period.
- Red (or black) — the close was lower than the open. Sellers won that period.
Why traders like candles
A line chart only shows the closing price. A candle shows the whole fight — where it opened, how far each side pushed, and who won by the close. That extra detail is why candlestick charts are the default for most traders.
One candle rarely means much
It's tempting to read deep meaning into a single dramatic candle, but context is everything. The same candle means very different things at the top of a long run-up versus the bottom of a sell-off. Look at candles in groups and alongside volume, not in isolation.
Frequently asked
What do green and red candles mean?
Green means the close was higher than the open, so buyers won that period; red means it closed lower, so sellers won. The colour only describes direction within that one period.
What are the wicks on a candlestick?
The wicks (or shadows) are the thin lines above and below the body, marking the highest and lowest prices reached. A long wick shows price pushed to an extreme and then got rejected back.
Can one candlestick predict the next move?
No, a single candle rarely means much on its own. The same candle can mean very different things at the top of a run-up versus the bottom of a sell-off, so read candles in groups and alongside volume.
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