Candlestick charts are the default way price is displayed on nearly every trading platform, and for good reason — a single candle packs four distinct pieces of information into one visual shape. Here's how to actually read one.
What a single candlestick shows
Each candlestick represents price movement over a specific time period (a minute, an hour, a day — whatever timeframe the chart is set to) and shows four values: the open (where price started the period), the close (where it ended), the high (the highest point reached), and the low (the lowest point reached).
The thick part of the candle — the "body" — spans between the open and close. The thin lines extending above and below — the "wicks" or "shadows" — show the high and low reached during the period, even if price didn't close there.
Reading the color
Most platforms color candles based on direction: typically green (or white, on older platforms) when the close is higher than the open — meaning price moved up over that period — and red (or black) when the close is lower than the open, meaning price moved down. The specific colors vary by platform and personal settings, but the underlying logic is consistent.
What the body size tells you
A long body indicates strong, decisive movement in one direction over that period — buyers or sellers were clearly in control. A short body indicates indecision or a relatively quiet period — the price didn't move far from where it opened, regardless of what happened in between.
What the wicks tell you
Long wicks, especially on one side, indicate that price moved significantly in that direction during the period but was pushed back before the period closed. A long upper wick suggests price rallied but was rejected and pulled back down; a long lower wick suggests the opposite — price dropped but recovered. This rejection pattern is often more informative than the body alone, since it shows a level where the market changed its mind mid-period.
A few genuinely useful patterns to recognize
Doji — a candle where the open and close are very close together, producing a tiny or nonexistent body, often with wicks on both sides. This represents genuine indecision — neither buyers nor sellers won that period — and is often watched for as a potential signal that a preceding trend may be losing momentum.
Engulfing pattern — when one candle's body completely "engulfs" the previous candle's body in the opposite direction, suggesting a potential sharp shift in control from one side to the other.
Pin bar / rejection candle — a candle with a small body and a long wick on one side, showing price was firmly rejected at that level — often watched around key support or resistance zones as a sign the level is holding.
Why this matters beyond manual chart reading
These same concepts — rejection at a level, decisive breakout movement, indecision — are exactly what underlies the kind of range-and-breakout structural analysis a well-built automated strategy performs, just evaluated systematically and continuously rather than by eye. Understanding what a candlestick actually represents makes it much easier to understand why a strategy reacts the way it does to a given price structure, whether you're reading the chart yourself or evaluating what an EA is responding to.
See how QMS Trading's Gold Edition reads range and breakout structure — built on exactly this kind of price-action logic, applied systematically rather than by eye.