How to read candlestick charts
A free beginner lesson. Learn what each candle tells you in 5 minutes, then test yourself with the quiz.
1. What is one candle?
A candlestick shows what the price did during one period, such as one hour or one day. It tells you four things: where the price opened, where it closed, and the highest and lowest price in between.
Move the sliders and watch the candle change. The thick part is the body (open to close). The thin lines are the wicks (highest and lowest).
2. Green and red
- Green candle: the price closed higher than it opened, so buyers won that period.
- Red candle: the price closed lower than it opened, so sellers won that period.
- Big body: strong move. Small body: the market could not decide.
- Long wick: the price went there but was pushed back.
3. Time frames
You choose how long each candle lasts. On a 1D chart every candle is one day. On 1H every candle is one hour. Short time frames show small, fast moves. Long ones (1D, 1W) show the bigger picture and are less noisy. Beginners should start with the daily chart.
4. Six common patterns
Traders look for shapes that sometimes appear before the price changes direction. Remember: a pattern is a clue, not a promise.
5. Support and resistance
Support is a price level where the price often stops falling and bounces back up. Resistance is a level where the price often stops rising and turns down. When a coin keeps bouncing off the same level, traders watch it closely. If the price breaks through, the level can flip: old resistance may become new support.
6. Volume
Volume is how much was traded. A big move on high volume is more believable than the same move on low volume.