Hover a part of the candle, or a label above, to see what it records.
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Four prices in one shape
Every candle summarises one period of trading, whether that period is one minute or one day. It records four prices: where the period opened, the highest price reached, the lowest price reached, and where it closed.
The thick part is the body. It spans the open and the close. The thin lines above and below are the wicks, sometimes called shadows, and they reach out to the high and the low.
Colour tells you direction
If the close is above the open, buyers won the period and the candle is drawn in the up colour (green on SheraTrade). If the close is below the open, sellers won and it is drawn in the down colour (red).
A long body means one side was in control for most of the period. A small body with long wicks means the price travelled a lot but finished close to where it started: indecision.
Three shapes worth knowing
A doji has almost no body: open and close are nearly equal. On its own it means little, but after a strong run it can signal that momentum is fading.
A hammer has a small body near the top and a long lower wick. Sellers pushed price down hard, buyers pushed it all the way back. It matters most at a level where price has bounced before.
An engulfing candle has a body that completely covers the previous candle's body in the opposite direction. It shows a sharp change of control.
Timeframes change the story
A strong green daily candle can contain dozens of red one-hour candles. Before acting on a pattern, check the timeframe above it so you know whether you are trading with or against the bigger move.
Key takeaways
- A candle is open, high, low and close
- Body = open to close, wicks = the extremes
- Patterns matter most at meaningful levels
- Always check the higher timeframe