Candlestick Chart
Also known as: candlestick, candle chart, Japanese candlesticks, candles
What is it?
A candlestick chart draws each time interval as a single candle: a rectangular body spanning the open and the close, and thin wicks reaching up to the high and down to the low. The body is coloured by direction — on SignalBots surfaces green when the close finished above the open and red when it finished below — so a whole session's balance of buying and selling reads at a glance. What makes the format useful is that body and wick answer different questions.
The body tells you where the interval started and ended, which is the net result; the wicks tell you how far price travelled and was rejected, which is the argument that got there. A candle with a small body and a long lower wick says sellers pushed price well down and buyers took it all back before the close — a very different message from a small body with no wicks, which says nothing much happened at all. Concretely, an H1 EUR/USD candle opening at 1.0840, running to 1.0872, dropping to 1.0835 and closing at 1.0846 has a small 6-pip green body and a 26-pip upper wick: net buying, but a decisive rejection of the highs.
Note the distinction from OHLC data, which is the underlying four-number row that every chart, backtest and bot reads — the candlestick chart is how those four numbers are drawn so a human can interpret them quickly.
Why it matters: It compresses an interval's open, high, low and close into one shape, so you can read who won the period and where price was rejected at a glance.
Nearly every technical setup, signal and bot rule is defined in terms of candle bodies, wicks and closes.
Real-world example
An H1 EUR/USD candle opens 1.0840, highs 1.0872, lows 1.0835 and closes 1.0846 — a 6-pip green body under a 26-pip upper wick, showing the highs were rejected.
How SignalBots handles it
SignalBots signals reference the candle they were evaluated on, so the entry, stop and target you receive line up with the same bars you are reading on your own chart. See /risk-warning.
Pro tip
Read the close before the colour — a green candle that closes near its low is weaker than a red one that closes near its high, and colour alone hides that.
Common pitfalls
Reacting to a candle's shape while it is still forming, when the body and wicks can change completely before the interval closes.
Frequently asked questions
What do the wicks on a candle mean?
The wicks mark the highest and lowest prices traded during the interval. A long wick shows price reached that level and was pushed back before the close, which is why traders read long wicks as rejection of that area.
How is a candlestick chart different from OHLC data?
OHLC data is the raw four-number row — open, high, low, close — that bots and backtests consume. A candlestick chart is a visual rendering of those same numbers, designed for a human to interpret quickly.
Does candle colour mean buy or sell?
Colour only reports whether the close finished above or below the open for that interval. It is a description of what happened, not a signal, and a single candle should never be traded on its own.
Which timeframe should the candles be?
Match the candle interval to your holding period — minute candles for scalping, hourly or daily for swing trading. The same price action tells a different story at every interval, so pick one and stay consistent.
Can candlestick patterns predict price?
No pattern predicts price reliably. Candlestick shapes describe past supply and demand and can improve context and timing, but they carry no guarantee, and every trade based on one puts your capital at risk. See /risk-warning.
Trading involves substantial risk of loss. Historical and backtested results do not guarantee future performance. Read the full risk warning.
