Module 8: Candlestick Basics
Key Takeaways
- Each candle shows the open, high, low and close (OHLC) for a time period.
- A bullish candle closes above its open; a bearish candle closes below.
- The body shows open-to-close; wicks show the extremes.
- Candles reveal the battle between buyers and sellers.
Candlestick anatomy
A candlestick summarises price action for one period (one minute, one hour, one day, etc.) using four values: open, high, low and close. The thick part is the body; the thin lines above and below are the wicks (or shadows).
Open
The price at the start of the period.
High
The highest price reached during the period (top of the upper wick).
Low
The lowest price reached (bottom of the lower wick).
Close
The price at the end of the period — the most important value, as it shows who won the period.
Bullish candles
A bullish candle closes higher than it opened — buyers were in control. It is usually shown green (or white). The open is at the bottom of the body, the close at the top.
Bearish candles
A bearish candle closes lower than it opened — sellers were in control. It is usually shown red (or black). The open is at the top of the body, the close at the bottom.
Long wicks show rejection: a long upper wick means buyers pushed up but sellers slammed it back down. This is a powerful clue you’ll use throughout the course.
Example
Imagine a 1-hour candle on EUR/USD: it opens at 1.1000, rises to 1.1030 (high), dips to 1.0990 (low), and closes at 1.1025. Because the close (1.1025) is above the open (1.1000), it’s a bullish candle with a small upper wick and a small lower wick.
Frequently Asked Questions
They show four data points per period instead of one, revealing the strength and emotion behind each move.
Open and close are nearly equal — a Doji — signalling indecision. You’ll study these in Module 16.