What Is a Candlestick?
A candlestick is the fundamental building block of technical analysis charts. Each candlestick represents price action over a specific time period, displaying four data points: open, high, low, and close. The rectangular "body" shows the open-close range, while thin lines ("wicks" or "shadows") extend to the high and low.
How Candlesticks Work
A green (or white) candle indicates the close was higher than the open (bullish). A red (or black) candle indicates the close was lower than the open (bearish). The length of the body shows the strength of buying or selling pressure, while long wicks indicate rejection at those price levels.
Why It Matters for Traders
Candlestick patterns are the foundation of price action trading. Specific patterns like hammers, engulfing candles, and dojis signal potential reversals or continuations. Reading candlestick anatomy — body size, wick length, and wick-to-body ratio — provides immediate visual insight into market sentiment for any timeframe.