Candlesticks — Beginner — Growth Capital Group

The Concept

What Is a Candlestick, Really?

A candlestick summarizes price action over one time period — a day, an hour, a minute, whatever the chart is set to — using four numbers: the open (price at the start), the high (the peak), the low (the trough), and the close (price at the end). Together these are often called "OHLC."

The thick middle part is the body, spanning the open and close. The thin lines above and below are the wicks (or "shadows"), marking the high and low. If the close is above the open, the body is usually shown green or hollow — the price rose over the period. If the close is below the open, it's shown red or filled — the price fell.

🕯️ Anatomy of a Candle

Bullish (up)
Close > Open

Bearish (down)
Close < Open

Doji
Open ≈ Close

A long body means a strong, decisive move in one direction. A tiny body with long wicks — a doji — means the price swung around a lot but ended up roughly where it started, often a sign of indecision between buyers and sellers.

📊 Real Example: Two Famous AAPL Trading Days

March 2020 gave the market two of its most dramatic single-day candles in recent history — one sharply bullish, one sharply bearish. Here's the actual OHLC data for both.

Date	Open	High	Low	Close	Day change
AAPL — Mar 13, 2020	$264.89	$279.92	$252.95	$277.97	+11.98%
AAPL — Mar 16, 2020	$255.94	$259.08	$240.00	$242.21	-12.86%

On Mar 13, AAPL opened at $264.89 and closed at $277.97 — a large green body — with a high of $279.92 and a low of $252.95 forming the wicks. Three trading days later, on Mar 16, it opened at $255.94 and closed at $242.21 — a large red body — as the market swung the other way during the early COVID-19 sell-off. Same stock, same size of move, opposite direction: exactly what a candle's color is built to show you at a glance.

Watch For This

5 Things to Know About Candlesticks

Every candle encodes four numbers — open, high, low, close — regardless of whether the period is a minute, an hour, a day, or a month.
The body shows open-to-close movement; the wicks show the full high-to-low range — a candle can have a small body but huge wicks if price swung wildly before settling.
Green/hollow means the close was above the open; red/filled means the close was below the open — color conventions vary by platform, so always check the legend.
A long body signals conviction; a tiny body (a doji) signals indecision between buyers and sellers during that period.
One candle alone rarely tells the full story — it's most useful in the context of the candles around it, which is what trend lines and moving averages help reveal.

Put It Into Practice

4 Things to Check When Reading a Candle

📏 Compare Body to Wicks

A big body relative to its wicks suggests a strong, one-directional move.
Long wicks with a small body suggest the price was pushed back the other way before the period closed.
Neither shape predicts what happens next on its own.

🎨 Check the Color Convention

Most platforms use green/red, but some use hollow/filled or blue/black instead.
Always confirm the legend before reading a new chart tool.
Color always maps to close vs. open — never anything more exotic than that.

🕰️ Note the Timeframe

A single daily candle and a single 1-minute candle look identical but represent wildly different amounts of information.
Match the timeframe to your own time horizon as an investor.

🔍 Zoom Out Before Concluding Anything

One dramatic candle, like AAPL's March 2020 swings, is a data point, not a forecast.
Look at the surrounding candles — that's what trend lines and moving averages are for.

Worth knowing: the AAPL prices above are unadjusted for Apple's later 4-for-1 stock split (August 2020), which is why they look higher than AAPL's price today. Candlestick shapes describe what already happened — they don't guarantee what happens next.

Activity

Try It Yourself: Build a Candle

Enter your own open, high, low, and close and watch the candlestick draw itself — a fast way to build an intuition for how the shape relates to the numbers.

Open ($)

High ($)

Low ($)

Close ($)

Bullish · Close > Open

Model: the body's height is scaled to the open/close gap, and the wicks are scaled to the high/low relative to the body — both proportional to the full high-low range, so shapes stay comparable across different price levels.

End of Lesson