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- Candles
Candles
Candlesticks are visual representations of price.
As the price of an asset moves up or down, it forms candles on a chart traders can use to identify direction and patterns.
If price moves up, it will form a green candle; If price goes down, it will form a red candle.
The structure of a candle is broken down into a body (the color-filled portion) and the wick (the thin line portion).
The body represents the prices between the candle's opening price and closing price, while the wick represents any price that traded outside of that opening/closing price range.
Candles also represent certain amounts of time, such as 1m, 5m, 1h, 4h, 1D, etc., depending on the chart timeframe you are using.
If you are on the 1D chart, for example, each candle will represent one full day of price action.
If you are on the 1m chart, each candle will represent just one minute, so timeframe context is very important.