In short
- A candle compresses OHLC for one stated interval.
- Body measures open-to-close; wicks record rejected excursions.
- Shape describes one bar, while location and follow-through supply context.
- Read geometry before pattern names.
After this lesson you can
- Reconstruct a candle from open, high, low and close
- Interpret body and wick proportions as interval-level evidence
- Evaluate a candle only within location, trend and participation context
Four prices, one interval
A candlestick encodes open, high, low and close. The body spans open to close; the wicks extend to the interval's extremes. A close above the open gives an up candle, while a close below gives a down candle. A long body shows a large net move inside that bar; a long wick shows price traveled farther but was rejected before the close. A candle records the path's endpoints and extremes, not every trade between them.
Key point: Body equals open-to-close; full range equals high-to-low; wick equals excursion beyond the body.
Read the component before the nickname
| What it shows | What it does not prove | |
|---|---|---|
| Long body | Large open-to-close move | Durable trend or future continuation |
| Long upper wick | Trade above the body that did not hold into the close | A guaranteed top |
| Long lower wick | Trade below the body that recovered before the close | A guaranteed bottom |
| Small body | Open and close were near each other | No volatility or no disagreement |
Common trap: trading candle names in isolation
Pattern names compress description, but they often discard the variables that matter most: location, prior trend, gap, volume and the next bar. The same shape at support after a decline and in the middle of a noisy range has different evidential weight. Describe OHLC geometry first; ask for context and follow-through second; use the nickname last.
Practise what you just read
Take this lesson's quiz and review cards in the app, then try the idea with virtual money in paper trading. Free account, no card.
Education only, not investment advice. Examples are illustrative. Read the full disclaimer