Candlestick

Anatomy of a candle

Each candlestick compresses one trading period – a minute, an hour, a day – into four values (OHLC): open, high, low, close. The body spans between open and close: if the period closes above the open, the candle is bullish (usually green/white), below it bearish (red/black). The wicks (shadows) show the extremes: prices that traded but did not hold. The representation originates from 18th-century Japanese rice trading and has become the global standard because it carries more information than a line through closing prices.

Reading candles: body and wicks as a balance of power

A candle's anatomy tells who controlled the period: a long body without notable wicks shows one-sided dominance. A long lower wick at a support shows sellers pressed price down but buyers reclaimed it – the basis of patterns such as hammer or pin bar. A doji (open ≈ close) signals stalemate. Patterns like engulfing or morning star formalise such constellations – their significance however depends heavily on context: the same candle means something different at a repeatedly tested resistance than in the middle of nowhere.

Timeframe and context

Every candle is an aggregation: a daily candle summarises hundreds of minute candles. A bullish daily close can contain dramatic intraday slumps. Many traders therefore work with multi-timeframe analysis – direction on the higher, timing on the lower level. Important for interpretation: only the candle close fixes the signal; unfinished candles change until the period ends – relevant for the closing-price rule in breakout trading, for example.

Why it matters for traders

Candlestick charts are the language in which price movement is read – from the single reversal candle to the order block zone. Patterns provide context, not guarantees: their hit rate belongs in one's own journal. In the GlanWick chart, candlestick patterns can be identified and evaluated on historical data by way of example – GlanWick is a training and simulation tool and not a prop firm itself.