One bar, four prices
Every candle on your chart is a summary of one time period — one minute, one hour, one day, whatever your chart is set to. It records four numbers:
- Open — the first price traded in that period.
- High — the highest price reached.
- Low — the lowest price reached.
- Close — the last price traded.
Those four are the same numbers a bar chart or a line chart would give you. What candles add is the shape: the rectangle between open and close, called the body, and the thin lines above and below it, called the wicks (or shadows).
Reading the parts
- The body is the part that stuck. Price moved from open to close and stayed there. A tall body means the move was decisive.
- The wicks are the part that got rejected. Price went up to the high and came back down; that distance is the upper wick. Someone tried to push higher and failed.
- A missing wick is information too. A candle that opens at its low and closes at its high has no wicks at all — buyers controlled it from the first tick to the last.
Colour is just a shortcut for direction
Your platform colours candles by whether close finished above or below open. Green (or hollow, on some platforms) means close above open — the period ended higher than it started. Red (or filled) means close below open.
That is all the colour means. It says nothing about whether the candle is large, or important, or whether price went up over the last hour. A tiny green candle inside a collapse is still green.
Where candles came from
Candlestick charting is commonly attributed to 18th-century Japanese rice traders in Sakata, and most often to a merchant named Munehisa Homma. The honest version is that the primary sources are thin and the attribution is traditional rather than documented. What is well documented is that candlesticks reached Western markets in 1991, when Steve Nison published Japanese Candlestick Charting Techniques — which is why almost every pattern name you will meet in this course is a translated Japanese one.
This matters for one practical reason: these tools were designed for a slow, pit-traded rice market on daily charts. Applying them unmodified to a 30-second CFD chart is your problem to solve, not theirs.
How to check this yourself
Open any chart, pick one candle, and read the four numbers off it out loud: open, high, low, close. Most platforms show them in a data box when you hover. Then look at the shape and say in one sentence what happened — "price opened here, was pushed down to here, and was bought back up to close here". Do that for ten candles and the rest of this course will read as common sense rather than as a list of names.