Most traders think they understand candlesticks the moment they learn that green means price went up and red means it went down. Then one day, a massive green candle appears — price opened, rallied hard, then collapsed back near the open — and the trade goes nowhere. That's the moment you realise the body was only half the story.
A single candlestick encodes four distinct price events into one visual object. The open is where price first traded when that time period began. The close is where it finished. The high and low are the absolute extremes reached during that period — captured in the thin lines above and below the body, called wicks (sometimes called shadows).
Take a concrete example. Suppose a stock opens at $100.00, surges to a high of $106.00, drops to a low of $98.00, and finally closes at $103.00. The candle body runs from $100 to $103 — a $3 green body. But the upper wick stretches $3 above the close, and the lower wick dips $2 below the open. That single candle tells you buyers eventually won the session, but sellers pushed back hard from the top.
The wick length is where the real context lives. A long upper wick on that $103 close signals that sellers entered aggressively near $106 and drove price back down — what technical analysts call rejection. A long lower wick means buyers absorbed selling pressure and defended lower prices. Neither message appears if you only watch the open and close. You can explore the foundational mechanics further at Investopedia's candlestick guide, cross-reference the broader history at Wikipedia's candlestick chart entry, and study the specific patterns built from these four data points at Investopedia's candlestick patterns page.
Every candle is a compressed record of a battle between buyers and sellers across one time period. Read all four data points — not just the colour.
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