How to read a candlestick chart
A candlestick shows four prices for one period: open, high, low and close. The body spans the open and close; it's green when price closed higher and red when it closed lower. The thin wicks show the high and low. Read candles in context — the trend and nearby levels matter more than one shape.
Green candle: price closed ₹10.00 above where it opened. Buyers won the day.
Big body, small wicks: one side was in control from open to close.
- 1Pick “Rejection from below” and drag the low further down. Watch the wick grow.
- 2Set the close equal to the open to make a doji.
- 3Drag the close below the open and see the candle turn red.
The four prices in every candle
A candlestick chart draws one candle for each period. On the daily chart that most swing traders use, one candle is one trading day. Every candle carries the same four prices.
| Price | What it is | Where you see it |
|---|---|---|
| Open | The first traded price of the period | One end of the body |
| Close | The last traded price of the period | The other end of the body |
| High | The highest price traded | Top of the upper wick |
| Low | The lowest price traded | Bottom of the lower wick |
The thick part is the body. The thin lines above and below it are the wicks, also called shadows.
Green and red candles
If the close is above the open, the candle is green (or hollow on some charts): buyers ended the period in control. If the close is below the open, the candle is red: sellers ended in control.
The size of the body tells you how strong that control was. A long green body means price closed far above where it opened. A tiny body, where open and close are almost the same, means neither side won — that candle is called a doji.
What the wicks tell you
Wicks show prices that were reached but not held. They are the part of the candle that tells a story.
- Long lower wick: sellers pushed price down, but buyers pushed it back up before the close. Lower prices were rejected.
- Long upper wick: buyers pushed price up, but sellers pushed it back down. Higher prices were rejected.
- Little or no wick: price closed near its extreme. One side was in control all period.
Use the sliders in the lab above to stretch a wick and watch how the reading changes.
Reading one candle in rupees
- Open
- ₹200
- High
- ₹212
- Low
- ₹196
- Close
- ₹210
- Body
- ₹210 − ₹200 = ₹10, green
- Upper wick
- ₹212 − ₹210 = ₹2
- Lower wick
- ₹200 − ₹196 = ₹4
Price dipped to ₹196, buyers took it back up and it closed near the high. Buyers controlled this day.
Read candles in context, not alone
One candle on its own says little. The same shape means different things in different places. A long lower wick at a level where buyers stepped in before — support or a demand zone — carries far more weight than one in the middle of nowhere.
- 1First, read the trend: are the candles making higher highs and higher lows, or lower ones?
- 2Then, look at where the candle sits: near a level, or between levels?
- 3Last, look at the candle: body size, wicks and colour.
Once this feels natural, move on to candlestick patterns, which are just two or three candles read together.
Reading a run of candles: a five-day walkthrough
Charts are read left to right, like a sentence. Here is a short run of daily candles on a practice stock we'll call Stock A. The prices are made up.
| Day | Open | High | Low | Close | What it says |
|---|---|---|---|---|---|
| 1 | ₹480 | ₹492 | ₹478 | ₹490 | Strong green body, small wicks. Buyers in control. |
| 2 | ₹490 | ₹501 | ₹488 | ₹499 | Another green day, a new high. The trend is up. |
| 3 | ₹499 | ₹503 | ₹489 | ₹492 | Red body with a long upper wick. ₹500+ was rejected. |
| 4 | ₹492 | ₹494 | ₹484 | ₹486 | Red again, but a small body. A calm pullback, not panic. |
| 5 | ₹485 | ₹497 | ₹481 | ₹495 | Long lower wick, green close. Buyers defended the dip. |
Read as a story: buyers pushed up for two days, sellers refused prices above ₹500 on day 3, the pullback on day 4 was quiet, and on day 5 buyers stepped back in near ₹481. That is a pullback inside an uptrend. None of it says what happens on day 6. It tells you where the buyers and sellers showed their hand, which is what you plan a trade around.
How the timeframe changes the candle
The same stock on the same day looks different on different charts. A daily candle is built from every trade in the session, from 9:15 am to 3:30 pm on NSE. A weekly candle is five daily candles folded into one. A 15-minute candle is one small slice of a day.
| Chart | One candle is | Who uses it |
|---|---|---|
| 15-minute | A slice of one session | Intraday traders timing entries |
| Daily | One full trading day | Swing traders: the main chart |
| Weekly | Five trading days | Swing and positional traders checking the bigger trend |
A long lower wick on the weekly chart carries more weight than one on a 15-minute chart because more money and more time went into it. A simple habit for swing trades: check the weekly chart for direction, plan on the daily, and only drop lower if you need a tighter entry. See swing trading vs intraday for why the daily chart suits most people with a full-time job.
Gaps, volume and the Indian market
Two things sit around the candle and change how you read it.
- Gaps: news often lands after 3:30 pm, so the next day can open well above or below the previous close. The chart shows an empty space between the two candles. A gap up that holds through the day is a stronger signal than one that fades back into yesterday's range.
- Volume: the bars under the chart show how many shares traded. A wide-range candle on high volume shows real participation. The same candle on thin volume is easier to ignore.
- Circuit limits: many NSE stocks have a daily price band. If a stock hits its upper or lower circuit, the candle may close at the high or low with almost no wick because trading froze, not because one side calmly won. Read those candles with care.
- Pre-open session: the open price of the day is set in the pre-open auction from 9:00 to 9:08 am. That is why the open can sit some distance from the previous close.
Common mistakes when reading candles
- Calling the next move from one candle. A candle describes what happened. It is not a forecast.
- Ignoring where the candle appeared. A hammer in the middle of a range means far less than one at a tested level.
- Reading the candle before the day closes. A daily candle is not final until the close. A long lower wick at 11 am can become a big red body by 3:30 pm.
- Mixing timeframes by accident. Make sure you know whether you are looking at daily or 15-minute candles before you draw conclusions.
- Forgetting the stop. Even a clean reading can be wrong. Decide where you are wrong first, then use the position size calculator to size the trade.
Practise on the lab above until you can read open, high, low and close without thinking. Patterns and levels build on this.
Quick check
Key terms
- Candlestick
- A chart mark that shows the open, high, low and close of one period.
- Body
- The thick part of a candle, between the open and the close.
- Wick
- The thin line above or below the body, reaching the high or the low. Also called a shadow.
- Doji
- A candle whose open and close are almost the same, showing indecision.
Common questions
What does one candle mean on a daily chart?
One candle is one trading day. Its body runs from the day's open to its close, and its wicks reach the day's high and low.
Which timeframe should beginners read?
The daily chart. It moves slowly enough to think, and it filters out much of the noise you see on 5- or 15-minute charts.
Is a green candle always a good sign?
No. A green candle only says the close was above the open. Where it appears, and what the trend is, matter more than its colour.
Do I need to learn every candlestick pattern?
No. Learn to read open, high, low and close well first. A handful of patterns, read at the right levels, is enough for most swing traders.
What is the difference between a candlestick chart and a line chart?
A line chart joins only the closing prices. A candlestick chart shows the open, high, low and close of every period, so you can see where price was rejected and who controlled the day.
Why does a candle sometimes have no wick?
The open or close was also the high or low of the period. Price went one way all day. On NSE, a stock that hits its circuit limit can also close with no wick because trading stopped.
Can I trade using candlesticks alone?
Candles tell you what happened, not what will happen. Combine them with the trend, a level and a stop-loss you decided before entry. That combination is what makes a plan.
Candlestick chart kaise padhe?
Har candle chaar price dikhati hai: open, high, low aur close. Body open aur close ke beech hoti hai, wicks high aur low tak jaati hain. Green candle matlab close open se upar, red matlab neeche.
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Education only — not investment advice. Trading in the stock market carries risk. Charts on this page use made-up prices for practice — they are not real stocks or recommendations. Examples are for learning only.