How to Read a Candlestick Chart: Bodies, Wicks and Colors
A candlestick chart draws each trading period as one candle, a filled box called the body with thin lines called wicks above and below it. The body runs from the open (the period's first price) to the close (its last price), and the wicks reach up to the high (its top price) and down to the low (its bottom price). To read a candle, use its color for direction, its body for how far the price moved and its wicks for how far it strayed and came back. A candlestick chart shows past prices only; it cannot say what comes next.
What It Means
The body is the box between the open and the close. The upper wick is the thin line from the top of the body up to the high, and the lower wick runs from the bottom of the body down to the low.
Color shows direction. In the drawing here, a green candle closed above its open and a red candle closed below it. Where the open and close sit depends on the color: a green candle has its open at the bottom edge and its close at the top, and a red candle has its open at the top and its close at the bottom.
Take one made-up green candle, read from top to bottom: high $47, close $44, open $40, low $38. The whole candle spans $9.
| Part of the candle | Runs from | Length (made-up) |
|---|---|---|
| Upper wick | high $47 down to close $44 | $3 |
| Body | close $44 down to open $40 | $4 |
| Lower wick | open $40 down to low $38 | $2 |
Where It Applies
A candle covers one period, and in Rapunzl the period depends on the tab: 1 month through 1 year draw daily candles, 5 years draws weekly ones and 15 years draws monthly ones, while the 1d tab, which lacks those four prices, draws as a line. The chart timeframes guide covers the tabs and the Candle Lengths setting, where the 5, 15 and 30 minute sizes belong to Rapunzl Premium.
Rapunzl also offers Line and OHLC charts, but a study that uses the high or low, like Average True Range, needs Candlestick or OHLC.
How to Read It
Three readings take you from a single candle to a full chart.
- Direction and size from the body. Check the color, then measure the body. The made-up candle above has a $4 body. A tiny body means the open and close were nearly equal.
- Rejected prices from the wicks. A long upper wick says the price climbed and was pushed back down. A long lower wick says it dipped and recovered. A green candle with almost no upper wick closed near its high, and a red candle with almost no lower wick closed near its low.
- The story from a run of candles. Read left to right, comparing each candle with the one before. The drawing's ten candles use these made-up prices:
| Candle | Open | High | Low | Close | Color |
|---|---|---|---|---|---|
| 1 | $20 | $26 | $18 | $24 | Green |
| 2 | $24 | $30 | $22 | $28 | Green |
| 3 | $28 | $31 | $23 | $25 | Red |
| 4 | $25 | $27 | $19 | $21 | Red |
| 5 | $21 | $25 | $17 | $23.50 | Green |
| 6 | $23.50 | $32 | $22.50 | $31 | Green |
| 7 | $31 | $37 | $29 | $35 | Green |
| 8 | $35 | $40 | $31 | $33 | Red |
| 9 | $33 | $36 | $27 | $29 | Red |
| 10 | $29 | $38 | $28 | $36 | Green |
Candles 3 and 4 give back $7, taking the close from $28 to $21. Candle 6 has the longest body, $7.50, inside a three-candle climb from $21 to $35. Candle 8 touches the run's highest price, $40, but closes at $33, leaving an upper wick of $5. Here each candle opens at the last close; on a real chart a period can open away from it.
Where It Misleads
Color answers one question: did this period close above or below its own open? A green candle does not mean the stock rose from the day before.
Size is relative. A $4 body is big on a quiet stock and small on a busy one, so judge a candle against its neighbors on the same chart. A weekly candle also folds a week of daily prices into one body and two wicks.
Try It in Rapunzl
Choose Candlestick under Customize Chart → Chart Type on any stock's chart. To mark named shapes, go to Customize Chart → Chart Indicators → Levels, Patterns & AI Charts and turn on Pattern Markers: ▲ for a bullish pattern, ▼ for a bearish one and ◆ for indecision. The 13 core patterns are free, and the 10 extended patterns are part of Rapunzl Premium.
Rapunzl's Stock Scanner reads candles for you on the latest daily bar. Its Bullish, Bearish and Indecision candlestick filters find stocks that completed that kind of pattern, and the scanner's own warning applies: candlestick patterns are hints, not promises. To see a match's candle, open that stock's chart and choose Candlestick.
A 15-Minute Class Activity
Candle Swap. Students work in pairs with graph paper (one square equals $1), a ruler, and a green and a red pencil.
- 3 minutes. On the board, draw the made-up candle from this guide (high $47, close $44, open $40, low $38) and name its body ($4) and wicks ($3 and $2).
- 4 minutes. Each partner invents a made-up candle, with a high above the other three prices and a low below them, and writes its four prices on a slip. They draw it in the right color with no numbers on the drawing.
- 5 minutes. Partners swap drawings. Each reads the four prices off the drawing, writes the body and wick lengths, and checks them against the slip.
- 3 minutes. Exit ticket: each student writes two short sentences, one on what a long wick shows and one on what a long body shows.
Related Indicators
- OHLC Chart: the same four prices as ticks instead of a body.
- Line Chart: one price per period, so no bodies or wicks.
- Candlestick Patterns for Beginners: named shapes built from these parts.
- Doji Candlestick Pattern: what a tiny body looks like and how it is read.
Frequently Asked
Questions
The upper wick runs up to the period's high and the lower wick down to its low. A long one shows the price went there and was pushed back.
No. Green only says the period closed above its own open (in the drawing here), not above the previous day's close.
The body covers the whole range. A green candle with no wicks opened at its low and closed at its high, and a red one opened at its high and closed at its low.
Bring Candlestick Charts Into Your Classroom
Teachers can request a demo and watch the charts, Stock Scanner and simulator work together in a lesson. Families can start on our parents page.
Indicators, patterns and examples in this article are for education and are not investment advice or a recommendation to buy or sell any security.
By Clarissa Collins, Curriculum Designer at Rapunzl.