JustChartsHow to Read Candlestick Charts: A Beginner’s Guide
Each candlestick shows four prices for one time period: open, high, low and close. The thick body spans the open and close — green (or hollow) when price closed higher, red when it closed lower — and the thin wicks show the highest and lowest prices reached. Long bodies show strong buying or selling; long wicks show rejection of a price level.
The anatomy of a candlestick
- Open — the first traded price of the period.
- Close — the last traded price of the period.
- High / low — the extremes, shown by the top and bottom of the wicks (also called shadows).
- Body — the rectangle between open and close. Green/up candles close above the open; red/down candles close below it.
Each candle represents one timeframe: on a 1-hour chart, one candle is one hour of trading; on a daily chart, one day.
What candlesticks tell you
- Long body, small wicks: one side was in control the whole period.
- Small body, long wicks: indecision — price moved but ended near where it started.
- Long lower wick: sellers pushed down but buyers pushed back (rejection of lower prices).
- Long upper wick: buyers pushed up but sellers rejected the higher prices.
Common candlestick patterns
| Pattern | What it looks like | What traders read into it |
|---|---|---|
| Doji | Open and close almost equal | Indecision; can precede a reversal after a strong trend |
| Hammer | Small body at the top, long lower wick, after a fall | Possible bullish reversal |
| Shooting star | Small body at the bottom, long upper wick, after a rise | Possible bearish reversal |
| Bullish engulfing | A green body fully covers the previous red body | Buyers taking control |
| Bearish engulfing | A red body fully covers the previous green body | Sellers taking control |
Patterns are far more useful in context — at support or resistance, after an extended move, or confirmed by volume — than on their own. No pattern works every time.
Why the timeframe matters
The same market can look bullish on a 15-minute chart and bearish on a daily chart. Many traders start with a higher timeframe to find the trend and key levels, then zoom in to time entries. On JustCharts you can switch between 11 timeframes from 1 minute to 1 month.
Candlesticks vs line charts
A line chart connects closing prices only. Candlesticks show the full range of each period, so you can see volatility and rejection that a line chart hides.
Frequently asked questions
What does a green candle mean?
The price closed higher than it opened during that period. A red candle means it closed lower.
What do the wicks on a candle mean?
They show the highest and lowest prices traded during the period. Long wicks show that price reached a level but was pushed back.
Which timeframe is best for beginners?
Higher timeframes such as 4-hour and daily charts are slower and contain less noise, which makes them easier to read and gives more time to make decisions.
Are candlestick patterns reliable?
They are useful clues, not predictions. Their reliability improves with context such as key price levels, trend and volume, and they should always be combined with risk management.
Put it into practice
Live charts, an economic calendar and trading calculators — free with a JustCharts account.
Open a live candlestick chartThis article is for education only and is not financial advice. Trading leveraged products carries a high risk of losing money. Contract sizes, trading hours and leverage limits vary by broker and country — always check your own broker’s specifications.