Trading Basics
How to Read a Price Chart
Learn what candlestick charts show, how to read timeframes, and why price history matters.
Key rules
- Each candle shows open, high, low, close
- Green = close > open (bullish), Red = close < open (bearish)
- Longer timeframe candles carry more weight
- Wicks reveal rejected price levels
- Always start analysis from higher timeframes and work down
A candlestick chart shows four data points per candle: open, high, low, and close. The body represents the range between open and close; wicks show the extreme price excursions. Green/white candles close above the open (bullish); red/black candles close below (bearish).
Timeframes determine what each candle represents. A 1-hour chart shows one candle per hour. Longer timeframes carry more structural significance because they represent more collective market decisions.