How do you read a candle chart?

Most candlestick charts show a higher close than the open as represented by either a green or white candle with the opening price as the bottom of the candle and the closing price as the high of the candle. Also, most candlestick charts show a lower close than the open represented by either a red or black candle with the opening price as the top of the candle body and the closing price as the low of the candle body.

Price action that happens outside the opening and closing prices of the period are represented by the wicks or shadows above the body of each candle. Upper wicks represent price action that occurred above the opening and the closing prices and the lower wicks represent price action that occurred below the opening and closing prices. Candlesticks are one type of chart that can be used in technical analysis to look for repeating patterns and in correlation with other technical indicators and signals. Candlesticks are combined in many patterns to try to read the behavior of traders and investors in buying and selling to create good risk/reward setups for trading. Candlestick charts have different settings. Candlesticks can be set to be green/red or they can be set as hollow candles. With the green/red settings the green candles occur when price closes higher than the previous close and red candles occur if price closes lower than the previous close.

Here is a candlestick cheat sheet illustrated guide for quick reference: