Before you can read any chart, you need to understand its basic unit: the candlestick. Every candle tells a complete story of what happened during a slice of time — whether that’s one minute or one week. Once you can read candles fluently, charts stop looking like noise and start telling you something.
The anatomy of a candle
Each candle is built from four prices, together called OHLC:
- Open — the price when the period started.
- Close — the price when the period ended.
- High — the highest price reached.
- Low — the lowest price reached.
The thick part is the body (the range between open and close). The thin lines above and below are the wicks (or shadows) — the extremes that price reached but couldn’t hold.
Green vs red
A green candle means price closed higher than it opened — buyers were in control. A red candle means price closed lower than it opened — sellers dominated.
The wicks matter as much as the color. A candle with a long lower wick, for example, shows that sellers pushed price down but buyers fought it back up before the close — often a sign of buying pressure. Reading wicks is where beginners start to level up.
Timeframes: pick the right lens
The same market looks completely different depending on your timeframe. Which one you use depends on how long you want trades to last:
- Scalpers: 1m, 5m, 15m — trades last minutes.
- Day traders: 15m, 1h, 4h — hours to a day.
- Swing traders: 4h, 1D, 1W — days to weeks.
- Position traders: 1D, 1W, 1M — weeks to months.
If you have a full-time job, swing trading on higher timeframes is usually the most realistic style.
Top-down analysis
Here’s a habit used by virtually every consistent trader: analyze from higher timeframes down to lower ones. The big picture (weekly, daily) gives you direction; the smaller picture (1h, 15m) gives you entry timing. Never let a 5-minute chart talk you into fighting the daily trend.
Practice beats theory
Reading candles well comes from reps. Pull up a chart, pick a timeframe, and narrate what each candle is telling you. After a few hundred, it becomes second nature.
None of this is financial advice — it’s foundational skill-building. See our disclaimer before trading real money.
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