A single candle on a chart sums up a whole session in one small shape: where the stock opened, where it closed, and how far it went up and down. Once you can read it, you see in a second whether the session was calm or choppy.
What you will learn
Know the parts of a candle: the body and the two wicks.
Read the four prices from any candle, green or red.
Tell a candle's color apart from the daily change color on the screen.
The lesson as a short video · 24 seconds · Watch on YouTubeIn this lesson
A candle has two parts: the body, the thick rectangle, and the two wicks, the thin lines above and below it. The body starts at the opening price and ends at the closing price. The upper wick reaches the session's highest traded price, and the lower wick its lowest.
The color tells you which is on top. A green candle means the close is above the open, so the open is at the bottom of the body and the close at the top. A red candle is the reverse: open on top, close at the bottom.
Green: closed above the open
High10.60
Close10.40
Open10.00
Low9.80
Red: closed below the open
High10.60
Open10.40
Close10.00
Low9.80
Body: between open and closeWick: out to the high and low
Same high, same low, same body size. The color only swaps where the open and close sit.
ExampleA green candle for an invented stock: it opened at 10.00, reached 10.60, dipped to 9.80 and closed at 10.40. The body is EGP 0.40 tall and the whole session range is EGP 0.80. So the body is half the range and the other half is wicks: the price swung around before it settled.
What the shape says
Without memorizing any names, you can read simple things from a candle's shape. A long body means the price travelled far from open to close. A long wick means the price went somewhere and could not stay there until the end of the session.
Long body, short wicksOne side was in control most of the session
Long upper wickThe price went high, then fell back before the close
Long lower wickThe price dropped a lot, then recovered before the close
Three common shapes. Each describes what happened in the session, not what comes next.
A single candle describes one session only. Its meaning gets clearer when you see it among the candles before it, which is the subject of common candlestick patterns.
Watch outA candle's color compares the close with the open, but the change color on the stock screen compares the last price with the previous close. A stock closed yesterday at 9.50, opened today at 10.40 and closed at 10.00: the screen shows green, up 5.3%, while the candle is red because it closed below its open.
Read the candles of a real stock
Open the candle chart of any stock and pick the latest candle. Find its four prices and see whether the body or the wicks are longer.