Open, high, low, close: four facts in one,a candle shows how the period was run.
A chart type that displays the open, high, low, and close prices for a given period, forming a candle-shaped pattern.
The body shows the open-to-close range while the wicks show the high and low.
In plain words
A candlestick draws what the price did in one period, such as an hour or a day, as a single shape. The thick part, the body, runs from the opening price to the closing price; the thin lines above and below it, the wicks, reach to the highest and lowest prices of the period. The colour of the body shows whether the close was above or below the open.
See it move
The period closes: the candle is complete
Why it matters
Candlesticks are the usual way a trading platform draws a chart. A candle shows four prices where a line chart shows one, so a reader sees not only where the price ended but how far it travelled on the way.
Worked example
An example only. The figures are round and invented for the arithmetic: they are not market prices.
In an invented hour a pair opens at 1.1000, rises to 1.1040, falls to 1.0990 and closes at 1.1030.
- 1Body1.1030 − 1.1000 = 30 pips, with the close above the open
- 2Upper wick1.1040 − 1.1030 = 10 pips
- 3Lower wick1.1000 − 1.0990 = 10 pips
- 4Whole range1.1040 − 1.0990 = 50 pips
The candle has a rising body of 30 pips with a 10-pip wick at each end.
A common mistake
A single candle is often treated as a forecast. It is a record of one period; candle patterns are said to indicate a change of mood, and they fail often.
Check yourself
Learn more
- Academy lessonCandlestick patternsThe anatomy of a candle and the single, two- and three-candle patterns most often named in price-action analysis, with their caveats.
- GuideJapanese candlestick patterns: a visual vocabularyDojis, hammers, engulfing bars and stars: what each pattern looks like, what it is taken to say about buyers and sellers, and why context matters more than the shape.
Educational information, not investment advice or a recommendation to trade.