How to read a candlestick
A candlestick compresses one market interval into four facts: open, high, low and close. On a daily chart, one candle is one trading day. On a five-minute chart, it is five minutes. Change the timeframe and you change what each candle means.
The thick body runs from open to close. A rising candle closed above its open; a falling candle closed below it. The thin wicks reach to the interval's high and low.
A long body shows decisive movement during that interval. It does not guarantee the next interval will continue.
A long upper wick shows price traded higher but sellers pushed it back before the close.
A long lower wick shows price traded lower but buyers recovered part of the fall.
A tiny body means open and close were similar. It shows balance or indecision, not an automatic reversal.
Use Candles on a SavantStox stock chart, then move across the chart to compare open, high, low and close. Never interpret one candle without its trend, volume and nearby price levels.
1. What does the candle body connect?
2. A long upper wick most directly shows that:
3. A candle's timeframe tells you:
Put this into practice with paper money in the sandbox.
Open my sandbox