Candlestick

In practice

A daily green candle on EUR/USD opens at 1.1040, spikes to a high of 1.1075, dips to a low of 1.1035, and closes at 1.1065. The body runs 1.1040→1.1065; the wicks above and below mark the high and low reached during the day.

Why it matters for traders

Candlesticks are the building blocks of every price-action decision, because each one tells a story of who was in control and for how long. Learning to read the body and the wicks turns a wall of numbers into a narrative of buyers versus sellers, which is the foundation of every pattern in this glossary.

Common pitfall

Beginners memorize dozens of named patterns and trade every one in isolation, ignoring where it forms. The pitfall is treating a candle as a signal rather than a snapshot of one period's struggle. A pattern's meaning comes from its context — trend, level, and what came before it. Learn to read the body and wicks first; named patterns are just shorthand for the same buyer-versus-seller story and mislead when read without that story.

Putting it in context

Like all candlestick concepts, this pattern is a clue about order flow, not a guarantee about what happens next. Its reliability depends heavily on context: the same shape means little in the middle of a range but can be significant at a well-tested support level, a prior swing high, or a round psychological number. Professional traders also weigh the timeframe — a signal on the daily chart carries far more weight than one on the five-minute chart, where noise dominates. Before trading any candlestick pattern with real money, scroll back through at least a hundred historical examples on the pairs you trade and note how often the expected follow-through actually occurred, and what the best confirmation and stop placement would have been.

Lessons that use this term

• What a single candle shows

  Open, high, low, close, body and wick — the four prices packed into one shape.

• Bullish vs bearish candles

  What candle colour really tells you — and the mistake almost every beginner makes with it.

• Hammer and Inverted Hammer

  The two bullish reversal candles that appear at the bottom of a move.

Related terms