Reading candlestick charts
Open, high, low and close: how one candle summarises a period and how to read intervals.
Most crypto charts use candlesticks. Each candle summarises trading over one period — one minute, one hour, one day — and shows four prices.
The four prices
- Open — the first trade price of the period.
- High — the highest price.
- Low — the lowest price.
- Close — the last price of the period.
Together they are called OHLC.
Body and wicks
The thick part of a candle, the body, spans from the open to the close. The thin lines above and below, the wicks (or shadows), reach the high and the low.
- A green (rising) candle closed higher than it opened.
- A red (falling) candle closed lower than it opened.
A long wick shows that the price went far in one direction during the period but came back before the close.
Intervals
The interval (timeframe) sets how long each candle lasts. Short intervals (1m, 5m) show fine detail and a lot of noise. Long intervals (4h, 1d) show the bigger picture. Looking at several intervals helps to avoid conclusions based on noise.
Volume bars
Many charts show volume as bars under the candles. A large candle with high volume carries more weight than a similar candle with little volume.
A word of caution
Candle patterns describe what has already happened. They do not predict the future with certainty, and the same pattern can be followed by very different moves.
University materials are for education only and are not investment, legal or tax advice.