Every candlestick tells a complete story — who was in control, how strong they were, and who won the battle between buyers and sellers during that time period.
Learning to read candlesticks is learning the language of the market. Once you understand it — charts stop being random noise and start making perfect sense.
Every candlestick contains exactly four pieces of information:
Open
The price at the very beginning of the time period.
Where the battle started.
Close
The price at the very end of the time period.
Where the battle ended.
High
The highest price reached during the period.
The maximum level buyers pushed price to.
Low
The lowest price reached during the period.
The maximum level sellers pushed price to.
These four prices — Open, High, Low, Close — are abbreviated as OHLC.
The body of a candlestick is the thick rectangular section.
It represents the range between the opening and closing price.
Green body — bullish candle
Close is HIGHER than open.
Buyers won the period — price ended higher than it started.
Body goes from open at bottom to close at top.
Red body — bearish candle
Close is LOWER than open.
Sellers won the period — price ended lower than it started.
Body goes from open at top to close at bottom.
Body size matters:
The thin lines above and below the body are called wicks — also known as shadows or tails.
Upper wick
Extends from top of body to the high.
Shows how high buyers pushed price — but sellers pushed it back down before close.
Long upper wick = sellers rejected higher prices strongly.
Lower wick
Extends from bottom of body to the low.
Shows how low sellers pushed price — but buyers pushed it back up before close.
Long lower wick = buyers rejected lower prices strongly.
Wick size matters:
Let’s read a complete bullish candle:
Example:
What happened:
Price opened at $80,000. Sellers immediately pushed it down to $78,000 — but buyers stepped in strongly and rejected that low. Buyers then pushed price all the way up to $85,000 — but some profit taking brought it back to close at $84,000.
What it tells us:
Buyers were dominant. Despite an early attempt by sellers — buyers took complete control and pushed price significantly higher. The small upper wick shows mild profit taking at the top but buyers remained strong overall.
Professional traders look at the ratio between body and wicks to judge momentum strength.
Large body, small wicks:
Strong directional momentum. Buyers or sellers completely dominated with little opposition.
Small body, large wicks:
Indecision. Both buyers and sellers fought hard but neither dominated. Often signals a potential reversal.
No body — Doji:
Open and close at almost identical price. Complete indecision. We will study this pattern in detail in upcoming topics.
Different platforms use different color schemes:
Most common:
Traditional Japanese:
Some platforms:
The colors don’t matter — only the relationship between open and close determines if a candle is bullish or bearish.
Before moving forward — practice identifying these elements on any chart:
Open Bitcoin on any timeframe and read 10 candles in a row. Tell yourself the story each candle is telling.
In the next topic we will learn how to read multiple candles together to understand momentum.