Candlestick Charts Explained
Learn how candlestick charts display price action and why they are the most popular chart type in forex.
Last reviewed: 2026-03-06
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Overview
Candlestick charts show open, high, low, and close (OHLC) prices for each period. Each candle has a body (open to close) and wicks (high and low). Green or white candles indicate price went up; red or black indicate price went down. Candlesticks reveal market sentiment and momentum at a glance.
Candle Anatomy
Body: The rectangle between open and close. Wick (shadow): The thin lines extending to high and low. A long body shows strong momentum; long wicks show rejection at those levels. Doji candles have very small bodies, indicating indecision.
Why Candlesticks
Candlesticks are preferred because they pack more information than line or bar charts. Patterns form that can signal reversals or continuations. They work on any timeframe from 1-minute to monthly.
Knowledge check
1 of 4What does OHLC stand for?
FAQ
Common questions about this topic.
What is the difference between a candlestick and a bar chart?
Both show OHLC. Candlesticks use a filled body; bar charts use a vertical line with ticks. Candlesticks are easier to read visually.
What do green and red candles mean?
Green (or white) means close higher than open (bullish). Red (or black) means close lower than open (bearish).
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