Technical Glossary / Chart Types & Price Representation
Candlestick Chart
A chart that draws each period as a body between open and close, with wicks to the high and low.
Teaching sketch. It shows the shape, not a live quote and not a trade signal.
Definition
A candlestick uses one mark per period. The body runs from open to close. The thin wicks, also called shadows, reach the high and the low. A filled or coloured body usually means the close was below the open. A hollow or opposite colour means the close was above the open.
How it works
Colour is a convention, not a fact about the market. Many platforms paint an up candle green and a down candle red. What matters is which end of the body is the open and which is the close.
How to identify it
You are on a candlestick chart when each period has a rectangular body and wicks. Switching to a line chart removes the open, high, and low and keeps only the close.
How traders use it
Candle shape is the raw material of candlestick patterns. The same OHLC data can be drawn as a bar. The candle just makes the open-to-close move easier to see.
Common mistakes
Reading colour alone. A green candle can still close below the prior close. Context, the level, and the next bar matter more than the paint.
Limitations
On a very small timeframe the open and close are noisy. A candle is one sample of a period, not a forecast.
This note explains the term. A sketch shows the shape of the idea. Neither is a recommendation, a signal, or a comment on any security. Indicator settings and exchange conventions differ. Check the live chart and the contract specification before you use a number.