Candlestick charts are on every trading screen, including the terminal your master trades from and the profile page you copy from. They look complicated. They are not. Each candle is four numbers drawn as a shape, and the shape tells a short story about a fight between buyers and sellers.
The four numbers
A candle covers a fixed period — one minute, one hour, one day. For that period it records:
- Open — the first price traded.
- Close — the last price traded.
- High — the highest price reached.
- Low — the lowest price reached.
The thick part, the body, runs from open to close. The thin lines above and below, the wicks, run to the high and the low. On most platforms a candle that closed above its open is green (or white) and a candle that closed below its open is red (or black). That is the whole notation.
Reading the body
A long green body means the price opened low and closed high: buyers were in control for most of the period, and they did not give much back. A long red body is the mirror image. A tiny body — open and close nearly equal — means the two sides fought to a draw. Traders call that a doji, and its meaning is simply "nobody won".
Body length is relative. A 40-pip body on EUR/USD in a quiet Asian hour is huge; the same 40 pips during a US inflation release is ordinary. Always read a candle against its neighbours.
Reading the wicks
Wicks show where the price went and was rejected. A long upper wick on a candle means buyers pushed the price up and then sellers drove it back down before the close — the highs were not accepted. A long lower wick means the opposite: sellers pushed down, buyers bought the dip, and the period closed well off the low.
This is why traders pay so much attention to wicks near important levels. If the price probes above last week's high, leaves a long upper wick and closes back below it, the market has tested the level and refused it. That single candle is the origin of most of the "pattern" names in the books: hammer, shooting star, pin bar. They are all the same observation — a rejection — with different names depending on where it happens.
Three candles worth knowing by sight
The engulfing candle
A green body that completely covers the previous red body. Sellers had the previous period; buyers took everything back and more in this one. At the bottom of a decline it is the most common sign that the decline is pausing.
The pin bar
A small body with one very long wick. The long wick is the rejection; the direction the wick points is the direction the market refused to go. A pin bar with a long lower wick at a support level is a buyer's signal; the same shape with a long upper wick at resistance is a seller's.
The doji after a run
After five green candles in a row, a doji says the buyers have paused. It is not a sell signal by itself, but it is the first hint that a move is tiring.
Timeframes
The same price action produces different candles on different timeframes. A daily candle with a long lower wick might contain, on the one-hour chart, a sharp fall and a sharp recovery — six red candles followed by six green ones. Neither view is more "true"; they answer different questions. Daily candles show where the market is going; hourly candles show how it is getting there.
Masters state their style on their profile. A swing trader reads daily and four-hour candles and holds trades for days; a scalper reads one-minute and five-minute candles and is out in minutes. When you copy, you inherit that timeframe, and with it the amount of noise your copy will see.
Volume, the missing dimension
Spot currency has no central exchange, so there is no true volume figure on a forex chart; the "volume" some platforms show is the number of price changes in the period, a rough proxy. It still helps. A long candle built on many ticks is a real move with many participants; a long candle on few ticks — typical of the quiet hours — is a thin market being pushed around, and it is more likely to be reversed when real volume arrives. On Bitcoin and other crypto pairs, where exchange volume is published, the same reading applies with better data.
What candles cannot tell you
A candle is history. It tells you, precisely, what happened; it tells you nothing certain about what happens next. The value of reading candles is not prediction. It is that you stop being alarmed by ordinary movement. A long red daily candle in gold that is followed by a long-wicked recovery is a normal week, not a crisis, and a master who held through it has not necessarily done anything wrong.
This article is education, not investment advice. Trading and copy trading in leveraged instruments carry a high risk of losing the funds you allocate. Read the Risk Disclosure.