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What is a candlestick chart?
A candlestick chart shows an asset's price over time as a row of bars, each covering one period. Each candle shows four prices for that period: the open, the high, the low and the close, so the range and direction can be seen at a glance.
What it means for you
A candlestick chart describes past prices only; it does not tell you what happens next. The period you pick changes the picture: one-minute candles look chaotic, weekly ones smooth. Named candle patterns are a trading convention, not a law of markets, and the same pattern can be followed by a rise or a fall.
How it works
Each candle has a thick real body spanning the opening and closing prices. Thin lines called shadows, or wicks, run from the body up to the period's high and down to its low. If the close is above the open, the body is drawn white or hollow, showing a rise; if the close is below the open, it is drawn black or filled, showing a fall. If open and close are equal, the body is just a horizontal line. The period of each candle can be set to anything.
An example
Say a coin opens a day at $100, trades as high as $112 and as low as $95, and closes at $108. That day's candle has a rising body from $100 to $108, an upper wick to $112 and a lower wick to $95.
Sources: Chen and Tsai: Encoding Candlesticks as Images for Pattern Classification Using Convolutional Neural Networks (arXiv), Wang, Huang and Wang: Forecasting open-high-low-close data contained in candlestick chart (arXiv) · checked 4 October 2026
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Educational content, not financial advice. Written by hand and checked against the source named above. Something wrong? Tell us and we reply within two business days.