Reading a Candlestick Chart
Open, High, Low, Close — what each candle tells you about a single time period.
Why candlestick charts?
A line chart only shows you the closing price. A candlestick chart shows you four prices for every time period — Open, High, Low, and Close — in one compact visual. It's the standard chart used by professional traders globally.
Anatomy of one candle
- Body — the thick rectangle. Top = higher of Open/Close. Bottom = lower.
- Wick (shadow) — the thin lines above/below. Show the day's High and Low.
- Green/White candle — Close was ABOVE Open (bulls won this period).
- Red/Black candle — Close was BELOW Open (bears won this period).
Anatomy of a candlestick
Reading a historical daily chart
Open: ₹1,476 | High: ₹1,520 | Low: ₹1,462 | Close: ₹1,509
This was a green candle: it opened at ₹1,476 and closed at ₹1,509 — buyers pushed it up ₹33 by end of day. The wick below (₹1,462) tells you it dipped intraday but recovered. The wick above (₹1,520) tells you it tried to go higher but sellers pushed back.
In one candle you have the full story of that trading day.
Common patterns to recognise
Doji — indecision
Open and close are almost equal. The body is tiny. Neither side won. Usually signals that the trend might be pausing or reversing.
Long green candle — strong buying
Big body, small wicks. Buyers dominated the entire session. Often appears after good news or at the start of a trend.
Shooting star — rejection at top
Small body at the bottom, long wick above. Price tried to rally but was heavily sold. Bearish signal — often marks the top of a short-term move.
Three common candlestick patterns
Timeframes
The same Infosys stock can look completely different on a 5-minute chart vs a daily chart. That's not a bug — each timeframe tells a different story. Day traders watch 1m/5m/15m. Investors watch daily/weekly.
Swing traders and long-term investors typically watch daily or weekly candles. Intraday traders use 1-minute, 5-minute or 15-minute candles to find entries within the session.
- Each candle = Open, High, Low, Close for one time period.
- Green candle = close above open (buyers won). Red = opposite.
- The wick shows how far price moved but didn't stick.
- Patterns like doji, shooting star help read intent — not guarantees.
- Timeframe matters — daily charts for trend, minute charts for entry.