Course › Level 1: The tools of the trade

Reading a candlestick

Charts show price as candlesticks, each candle summarises one chunk of time (1 minute, 15 minutes, 1 hour…).

One candle tells you four things: where price opened, the highest it went, the lowest it went, and where it closed.

• Green (bullish) candle, closed higher than it opened. Buyers won that round.
• Red (bearish) candle, closed lower than it opened. Sellers won.
• The thin lines above and below (the wicks) show where price visited but couldn't stay.

Why wicks matter

A long wick is a rejection, price pushed there and got slapped back. A candle that spikes down and closes back up tells you buyers defended that level aggressively. You'll use this in Level 2.

One warning that will save you money later: a candle isn't finished until it closes. A candle can look strongly bullish at minute 13 and close bearish at minute 15. Traders who act on unfinished candles get faked out constantly.

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