Understanding Candlestick Charts

In one line: A candlestick chart turns each slice of time into a small picture that shows how the fight between buyers and sellers ended.

🎯 What you'll learn

Each candle covers a fixed period. You pick the period (the timeframe).

1 candle can mean 1 minute, 5 minutes, 1 hour, or 1 day.
On a daily chart, one candle = one full trading day.
On a 5-minute chart, one candle = 5 minutes.
Think of it like a cricket over. One over is a small block of the match. One candle is a small block of price.

OHLC means Open, High, Low, Close — the four prices for that time slice.

Open — the price when that period started.
Close — the price when that period ended.
High — the highest price touched in that period.
Low — the lowest price touched in that period.
The thick middle part is the body (open-to-close). The thin lines above and below are the wicks (also called shadows).

The colour tells you who won that period.

Green (or white) = bullish candle — the close was HIGHER than the open. Buyers were stronger.
Red (or black) = bearish candle — the close was LOWER than the open. Sellers were stronger.
Green pushes price up. Red pushes price down.

Every candle tells a small story about the crowd.

Bigger body = stronger momentum (strong one-sided push that period).
Longer wick = rejection or indecision (price went there, then got pushed back).
Candles hint at who is in control, the strength of the move, and the mood of the market — fear, greed, or "not sure yet."
Read the candles, not just the line of the chart.

Say Reliance shares trade for one day. On a daily chart this is ONE candle.

Close (₹115) is above open (₹100), so it is a green candle. Buyers won today.

A tiny sketch of that candle:

 |     <- wick up to high 120
 |
[###]  <- body top = close 115
[###]
[###]  <- body bottom = open 100
 |
 |     <- wick down to low 95

Thinking green always means "buy now" and red means "sell now." A colour is history, not a signal.
Ignoring the timeframe. A green 1-minute candle is a tiny event; a green daily candle is a much bigger one.
Only watching the body and forgetting the wicks. Long wicks carry important information.
Reacting to one candle alone. One candle is one over, not the whole match.
Assuming a big body guarantees the move continues. It shows past strength, not the future.

Q: A candle opened at ₹50 and closed at ₹45. What colour is it and who was stronger? A: Red (bearish). The close is below the open, so sellers were stronger.
Q: On a 1-hour chart, how much time does one candle cover? A: One hour.
Q: A candle has a small body but a very long lower wick. What does the long wick suggest? A: Rejection — price fell low, then got pushed back up, showing buyers stepped in.

Candlestick — a coloured shape on a price chart that shows the open, high, low and close for one time slice.
Timeframe — the length of time one candle covers (for example 1 minute or 1 day).
OHLC — short for Open, High, Low, Close.
Body — the thick part of a candle, between the open and close prices.
Wick (shadow) — the thin line above or below the body, showing the high and low.
Bullish — a move or candle where price went up (buyers winning).
Bearish — a move or candle where price went down (sellers winning).
Momentum — the strength or speed of a price move.

Educational content only — not financial advice. Trading involves the risk of losing money.