What are the parts of a candlestick?

Candlesticks come from Japanese rice traders in the 1700s, hence the name. Each candle covers one period: 5 minutes on a 5-minute chart, one day on a daily chart.

Say a 5-minute candle opens at $50.00, trades up to $50.60, dips to $49.80 and closes at $50.45. It closed above the open, so it is green, with a body from $50.00 to $50.45 and wicks reaching $50.60 and $49.80. On a red candle the open is the top of the body. On TradingView, hover over any candle and the legend at the top left shows its O, H, L and C.

  • Open: the first traded price of the period.
  • High: the highest price traded, at the tip of the upper wick.
  • Low: the lowest price traded, at the tip of the lower wick.
  • Close: the last traded price, and the one most traders watch closest.
  • Body: the box from open to close, green when the close is higher and red when it is lower.
  • Wicks, or shadows: the thin lines above and below the body, showing prices that traded but did not hold.

What does a candlestick tell you about buyers and sellers?

A candle is a short record of a fight. The body shows who was ahead at the close. The wicks show where one side pushed and the other pushed back.

Judge each candle against its neighbors. A $0.40 body is big among $0.10 candles and small after a run of $1.00 candles. Volume adds weight too: a rejection wick on twice the usual volume means more than the same shape on a quiet bar.

  • Long body, short wicks: one side controlled the period. A green candle closing at its high shows buyers pressing to the end.
  • Long upper wick: buyers pushed up and sellers drove price back down. Higher prices were rejected.
  • Long lower wick: sellers pushed down and buyers lifted price back up. Lower prices were rejected.
  • Small body with wicks on both sides: neither side won.

Which candlestick patterns are worth learning?

There are dozens of named patterns, and you need very few. These four cover the ideas that matter: rejection, a shift in control, indecision and compression.

Treat each one as context. It shows that something happened at that spot, and none of them works as a buy or sell button on its own.

  • Hammer, shooting star and pin bar: a small body at one end and a long wick, roughly twice the body or more, at the other. A hammer (long lower wick) after a drop shows sellers pushed hard and lost. A shooting star is the mirror image after a rise. Pin bar covers both.
  • Engulfing: a body that completely covers the previous candle's body, in the opposite color. A bullish engulfing after a pullback shows buyers took back everything sellers did in the prior bar.
  • Doji: open and close almost equal, so the body is a thin line. After a long run it can mean momentum is fading. Inside a range it means very little.
  • Inside bar: a candle whose high and low sit inside the previous candle's range. The market is coiling, and many traders wait for a close beyond either end.

Why location matters more than the candlestick pattern

The same candle can mean a lot or nothing, depending on where it forms. A hammer at support shows buyers defending a price other traders watch. A hammer in the middle of a range only shows that price wiggled.

Say a stock in an uptrend pulls back to a support zone from $98.50 to $99.00, the prior day's low. A 15-minute candle dips to $98.60 and closes at $99.30. That hammer has a reason to exist and a clear stop below the wick and the zone at $98.40: $0.90 of risk per share if you buy near $99.30 on the next open. The same shape at $101.20, halfway between support at $99 and resistance at $103, has nothing to defend and no obvious stop.

Run these checks before acting on any pattern. The support and resistance strategy guide shows how to mark the levels themselves.

  • Is it at a level that matters, such as a support or resistance zone, the prior day's high or low, or VWAP?
  • Does it point the same way as the bigger trend?
  • Is volume above normal for that time of day?
  • Is there enough room to the next level for a target worth the risk?

Why you should wait for the candle to close

A candle is not finished until it closes. Its high, low and close move with every trade, so its shape can change completely.

Take the hammer above. Twelve minutes into the 15-minute candle it looks perfect: down to $98.60 and back up to $99.30. In the last three minutes sellers return and it closes at $98.45, below the zone. The rejection has become a breakdown candle, the opposite signal.

So judge only closed candles and act on the next candle's open. On TradingView, right-click the price scale and tick Countdown to bar close to see how long a bar has left. Indicators follow the same rule: tools that signal on the open candle can show arrows that later vanish, which is called repainting.

Turn your phone sideways to read the drawing. Tap to close.

Two hand-drawn panels of the same 15-minute candle at a $98.50–$99.00 support zone. Twelve minutes in, with its outline still dashed, it looks like a perfect hammer: down to $98.60 and back up to $99.30. At the close it is a red candle that finished at $98.45, below the zone: the opposite signal.

How the timeframe changes a candlestick

A candle's shape depends on the timeframe. A 1-hour candle is twelve 5-minute candles merged: the open of the first, the close of the last, and the highest high and lowest low among them.

Say a stock starts an hour at $100, sells off to $98.80 over 40 minutes, then rallies to close the hour at $100.30. The 1-hour chart shows a hammer. The 5-minute chart shows mostly red candles, then four strong green ones. Same trades, two pictures.

Patterns on higher timeframes carry more weight, because more trading went into each candle. Read the pattern on the timeframe you trade, then check that the bigger timeframe leans the same way. Many day traders work on 5-minute to 1-hour charts; the day trading for beginners guide puts candle reading into a full plan.

Turn your phone sideways to read the drawing. Tap to close.

Left, twelve hand-drawn 5-minute candles: from $100.00 they fall to $98.80 over 40 minutes, mostly red, then four strong green candles close the hour at $100.30. Right, the same hour as one 1-hour candle: open $100.00, low $98.80, close $100.30, a hammer. Dotted lines link the three prices across both pictures.

How to switch to candlesticks or Heikin Ashi on TradingView

The steps are below. First, know what Heikin Ashi changes. Its candles are averages: each close averages the period's open, high, low and close, and each open is the midpoint of the previous Heikin Ashi body. Trends show as long runs of one color, and much of the noise disappears.

The cost is that the candles stop showing real prices. Say a stock closed at $98.50 yesterday and opens at $100 today. A regular candle shows the gap. The Heikin Ashi candle opens at the midpoint of yesterday's Heikin Ashi body, say $98.10, a price nobody traded today, so stops and entries planned from it land in the wrong place. Strategy backtests on Heikin Ashi charts can also fill at these synthetic prices unless Fill orders using standard OHLC is ticked in the strategy's Properties; it is off by default.

Use Heikin Ashi as a second chart for the trend, and plan entries, stops and pattern reads on regular candles.

  1. Click the chart type button in the top toolbar, next to the timeframe.
  2. Choose Candles. Hollow candles and Bars show the same four prices in a different style.
  3. To change colors, click the gear icon for Settings, open the Symbol tab and set the body, border and wick colors.
  4. For Heikin Ashi, pick it from the same menu. Then in Settings, on the Symbol tab, tick Real prices on price scale so the scale shows the actual market price.

How UpTickFlow uses closed candles

UpTickFlow is our invite-only indicator for TradingView, so weigh this accordingly. Its signals are calculated on closed bars only, and higher-timeframe values come from closed higher-timeframe bars, so a signal never repaints once it appears. The planned entry is the next bar's open.

All three of its triggers are candle closes: a rejection or reclaim close at a support or resistance zone, a close back across a level after a liquidity sweep, or a close back across session VWAP. Arrows in its dashboard show the trend on each of the three higher timeframes it reads.

It does not predict the market. It filters setups and gives you an entry, stop and target. You can read candles this way by hand on any free TradingView chart; the indicator is $19 every 30 days, as shown on the pricing page.