How to read candlestick charts
A candlestick chart is a type of financial chart that shows price action for an investment market, such as a currency or security. The chart consists of individual “candles” that show the daily open, close, high and low prices for the market they represent for a given timeframe.
1
Notice that the market price increases if the candle is green or blue. The color of the candle is usually green or blue if the market is going up. This may vary depending on the diagram you are viewing.[1]
If the candlestick chart is black and white, then the body will be hollow for an already developing market.
2
Admit that the market price will drop if the candle is red. The color of the candle is usually red if the market is down. That is, the market price closed lower than when it opened [2].
If the candlestick chart is black and white, then the body will be filled with black for a falling market.
3
Look for the opening price at the bottom of the green candle or above the red candle. The opening price is at the bottom of the body if the market is bullish. It's in the upper body if the market is shrinking.[3]
It is important to ascertain what color the candles are before you check the open and close prices to make sure they are not confused. Always double-check the color settings or buttons for the app or platform on which you are viewing the graph.
4
Find the closing price at the top of the green candle or at the bottom of the red candle. The closing price is the upper part of the body if the market price is rising. This is the bottom of the body if the market shrinks.[4]
For example, if you see a candle with a red body, then you know that the price is going down, meaning that the closing price is at the bottom of the candle body and not at the top.
5
Check the upper shade of the candle for the high price. The shadow is the line at the back of the candle body and is sometimes also known as the "wick" of the candle. Look at the top row to see the highest price in the market.[5]