In plain English
What Candlestick means
Each candle compresses price activity into one visual unit. On a 15-minute chart, one candle represents 15 minutes; on a daily chart, it represents one trading day. A rising-colored candle usually closed above its open, and a falling-colored candle closed below it, but the colors are a platform setting rather than a universal rule.
Why it matters
Candlesticks preserve more information than a closing-price line chart. They let an analyst compare the period’s range, opening-to-closing move, and where the close sat within that range. Those observations can support a market-analysis view, but a single candle does not establish future direction or guarantee a reversal.
Example
Suppose EUR/USD opens a one-hour period at 1.0800, trades as high as 1.0830 and as low as 1.0790, then closes at 1.0820. The candle’s body runs from 1.0800 to 1.0820, with a top wick to 1.0830 and a bottom wick to 1.0790. Values are simplified.
Quick answers
Common questions
Do candlesticks show trading volume?+
Not by themselves. A standard candlestick shows open, high, low, and close for its period. Platforms may display volume separately, but volume is not encoded in the candle body or wick.
What does a long candlestick body mean?+
It means the opening and closing prices were far apart relative to that candle’s price scale. It describes the completed period’s movement, not a certain forecast for the next period.
Sources