What is a candlestick chart? How to read price charts in crypto and forex
By SendPay Business · · 2 min read
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A candlestick chart shows how a price moved over time, one candle per time period. Each candle packs four prices into one shape: where the price opened, where it closed, and the highest and lowest it reached. The style was first developed in Japan for trading rice.
Reading a single candle
- The body shows the opening and closing price.
- A green (or hollow) body means the price closed higher than it opened.
- A red (or filled) body means it closed lower.
- The thin lines above and below, called wicks, show the highest and lowest price in that period.
Timeframes
Each candle can cover any period: one minute, one hour, one day or one week. The same market can look calm on a daily chart and wild on a one-minute chart, so always check which timeframe you are looking at.
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What long wicks and small bodies tell you
A long wick means the price moved a long way but was pushed back before the period ended. A very small body means the price closed close to where it opened, showing indecision. Traders give names to many shapes, such as the doji and the hammer.
Patterns are not predictions
Candlestick patterns describe what already happened. They can help you read a market, but no pattern reliably tells you what the price will do next.
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Questions people ask
How do I work out MACD?
Our free MACD calculator turns a list of closing prices into the MACD line, signal line and histogram.
MACD calculator →How do I work out a moving average?
Our free moving average calculator turns a list of closing prices into the simple and exponential moving average for any period.
Moving average calculator →Read next
Spotted a mistake or something out of date? and we'll fix it. How our guides are made
This guide is general information, not legal or financial advice. SendPay Business is a technology company, not a bank, and does not take deposits; regulated services on the platforms are provided by licensed partners. Other companies named in this guide are reference points only and are not affiliated with SendPay Business.