Candlestick
Definition
A candlestick is a single bar on a price chart showing four pieces of data for a specific time period: the opening price, the high, the low, and the closing price — giving you a complete picture of what buyers and sellers did during that period.
Example
“The 15-minute candle had a tiny body at the top of a massive wick. Price had tried to break down hard, got rejected, and buyers closed it near the highs. That was all the information I needed to flip long.”
Detailed Explanation
The body of the candle — the thick part — shows the distance between open and close. A green (or white) candle means price closed higher than it opened; buyers won that period. A red (or black) candle means price closed lower; sellers won. The wicks — the thin lines extending above and below the body — show the extremes that were reached but rejected. A long wick tells you that price ventured into territory but couldn't hold there, which often signals where significant buying or selling pressure exists.
Individual candle patterns like dojis, pin bars, engulfing candles, and hammers tell specific stories about the battle between buyers and sellers in a given period. But a single candle in isolation is almost meaningless — context is everything. The same doji at the top of an extended uptrend near major resistance is a very different signal than a doji in the middle of a tight consolidation. Candles are most powerful when read alongside trend, volume, and key price levels.
The timeframe you choose changes everything about what you're seeing. A 1-minute candle captures 60 seconds of battle; a daily candle captures 6.5 hours. Day traders typically watch multiple timeframes simultaneously — a higher timeframe (like 15-minute or daily) for context and trend direction, and a lower timeframe (like 1-minute or 5-minute) for precision entries and exits. The candle that looks like a sideways mess on a 1-minute chart might be a clean, high-conviction pin bar on the 15-minute.