Each "candle" on a chart summarizes price action over a fixed time window — a minute, an hour, a day, whatever the chart is set to.
The four numbers behind every candle
- Open — the price at the start of that time window
- Close — the price at the end of it
- High — the highest price reached during it
- Low — the lowest price reached during it
The "body" of the candle is the space between open and close — usually colored green/white if the close was higher than the open, and red/black if lower. The thin lines above and below ("wicks") show the high and low.
What people actually use this for
Candlestick patterns (like "doji" or "engulfing" candles) are used to guess short-term sentiment — whether buyers or sellers were more aggressive during that window. They're a tool for gauging momentum, not a crystal ball, and they work best combined with other context (volume, broader trend, news) rather than read in isolation.
A word of caution
It's easy to see patterns that aren't really there, especially on short timeframes with low trading volume. Treat chart reading as one input among several, not a standalone trading system.