Open any trading page, and the first thing that stands out is row after row of red and green candlesticks. They may look complicated, but each one records just a few simple numbers. Once you understand them, you can see how the price has moved.
Corresponding coin: $BTC quoted at 81,329.76 (24h -3.5%).
▍The four prices in a single candlestick
Candlesticks are generally believed to have originated in Japan's rice markets and were later widely adopted in stock, futures, and crypto markets. Each candlestick records four prices over a given period: the opening price, highest price, lowest price, and closing price.
The thicker section in the middle is called the body; it connects the opening price and closing price. The thin lines extending above and below are called wicks. The top of the upper wick marks the highest price during that period, and the bottom of the lower wick marks the lowest price.
▍Bullish, bearish, and colors
A candlestick is bullish when the closing price is higher than the opening price, and bearish when the closing price is lower. When the opening and closing prices are almost the same, the body shrinks to a horizontal line, often called a doji.
Pay special attention to the colors: Binance uses green by default to indicate a rise and red to indicate a fall, while stock-trading apps in China typically use red for rises and green for falls. You can switch this in Binance’s settings, so check which color scheme you’re using before reading the chart.
▍Timeframes and trading volume
Candlesticks can be viewed across different timeframes, from 1-minute charts to daily and weekly charts. The longer the timeframe, the more trading activity each candlestick represents. The same market movement can look completely different across different timeframes.
The crypto market trades 24 hours a day. The “open” of a daily candle is simply the point in time determined by the time zone. Binance’s daily candles default to UTC midnight, which is 8 a.m. Beijing time (depending on the chart’s time zone settings). The bars below the candlesticks usually show trading volume, or how much was traded during each period.
▍How wicks are often interpreted
A long upper wick is often interpreted as the price surging before encountering selling pressure and being pushed back down. A long lower wick is often interpreted as buyers stepping in when the price dips. These are just descriptions of price movements that have already happened.
A single candlestick can’t tell you what will happen next. A more reliable approach is to consider it alongside longer timeframes and trading volume—and remember that every pattern can fail.
▍In a nutshell
Candlesticks record what happened; they don’t predict what will happen. They’re much more useful as a tool for reviewing market movements than as a signal for guessing whether prices will rise or fall. Understand the basics before you start trading, and don’t place orders on impulse.
When did you first get the hang of this?