Start with the timeframe
Each candle summarises prices over one period. A daily candle covers a trading day; a five-minute candle covers five minutes. Check the selected timeframe before comparing candles. A movement that looks dramatic over minutes may be small on a yearly chart.
Read the four prices
Open is the first price in the period. Close is the last. High and low are the extremes reached. The thick body joins open and close. The thin wicks extend to the high and low. Common colour schemes use green for a close above the open and red for a close below it, but settings vary.
A worked example
Imagine a share opens at £100, reaches £115, falls to £85 and closes at £108. Its body runs from £100 to £108. The upper wick reaches £115 and the lower wick reaches £85. It finished £8 above its opening price, but the full trading range was £30. These are fictional prices.
A green candle can still follow a fall
Candle colour usually compares the close with the open, not with yesterday’s close. If yesterday closed at £110 and today opened at £100 and closed at £108, today’s candle can be green even though the share is below yesterday’s close. Check what the chart’s percentage figure measures.
Put the candle in context
Look at neighbouring candles, trading volume, company announcements and the wider market. A long wick describes where prices travelled; it does not prove a reversal is coming. Candle patterns do not guarantee future returns.
Try it yourself
Use the slider below to change the closing price. Notice that the opening price and high/low stay fixed. Then open the stock chart and compare daily and weekly views of the same symbol. This is a reading exercise, not a signal to buy.
One candle. Four prices.
Move the closing price to see how the candle changes.
The close is above the open: an up candle. This describes the past, not the next move.
Sources and further reading
Provider settings and financial products can change. Check original sources before acting. These guides explain concepts and do not recommend individual investments.