3. Candlestick Charts

Anatomy of a Candlestick

A candlestick has three basic features:

  • The body, which indicates the open-to-close range
  • The wicks (also called tails or shadows), which are the long thin lines above and below the main body. These reveal the intra-day high and low.
  • The color, which represents the direction of price movement. A green (or white) body shows a price increase, while a red (or black) body indicates a price decrease.


The main body (colored portion of the candlestick) shows you the opening price and closing price of the stock.

A long body indicates heavy trading and strong selling or buying pressure, while a small body indicates lighter trading in one direction and little selling or buying activity.


Green or white candlesticks signify the stock price closed higher than it opened.

A red or black candle tells you the stock price closed lower than it opened.


The highest point of the upper wick shows you the highest traded price for that time period. If the open or close was the highest price, then there will be no upper wick.

The lowest point of the lower wick indicates the lowest traded price for that time period. If the open or close was the lowest price, then there will be no lower wick.

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