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What is a candlestick in trading?

In one line: A candlestick is one bar on a price chart that shows four prices for a set time: where price opened, its high, its low, and where it closed.

Trading glossary · Updated 2026-10-21

The parts of a candle

• The body is the thick part. It runs from the open to the close.
• The wicks are the thin lines above and below. They show the highest and lowest prices reached.
• The color tells you the direction. Green (or white) means it closed higher than it opened. Red (or black) means it closed lower.

A simple example

On a 1-hour chart, one candle covers 10:00 to 11:00. During that hour, a stock:

• opened at $20.00,
• dropped to $19.70,
• climbed to $20.60,
• and closed at $20.40.

That candle is green, because $20.40 is above $20.00. Its body runs from $20.00 to $20.40. The top Wick reaches $20.60 and the bottom wick reaches $19.70. In one picture, you see the whole hour's fight between buyers and sellers.

Why it matters

A candle tells a short story. A long green body says buyers were in control all the way to the close. A long top wick says buyers pushed up, but sellers shoved price back down before the close.

In our method, the close matters most. Only a candle body closing past a level counts as a real move. A wick poking through and pulling back doesn't. More in how to read candlestick charts.

A common mistake

Reading a candle before it has closed. A candle that looks strong halfway through the hour can finish with a long wick and a tiny body. Until the time is up, it's still changing. Wait for the close.

The other mistake is reading one candle alone. A single candle means more at a Support or Resistance level than in the middle of nowhere.

Questions