The anatomy of a candlestick

By the XAUUSDLiveChart Research Desk · 4 min read

A candlestick compresses every trade in its window into five numbers: open, high, low, close and the time bucket itself. The body shows the net result, the wicks show the rejected excursions, and the close location grades the winner's conviction. Read those parts fluently and most named patterns become obvious consequences rather than vocabulary to memorise.

Body: the net verdict

The body spans open to close: the distance the auction actually settled, not merely visited. A body filling most of the range says one side controlled the period start to finish. A tiny body says the fight ended near where it began, whatever drama the wicks contain.

Wicks: the rejected territory

Wicks mark prices the market tried and refused to keep. A long lower wick means sellers pushed down and were absorbed; a long upper wick means buyers extended and were faded. Wicks are where the interesting failures live, and failures at important levels are information, as the candle signals notes explore.

Close location: the grade

Where the close sits inside the range grades the candle. Closing in the top quarter after a wide range is strength that usually invites follow-through; closing mid-range after the same journey is indecision wearing a big costume. Close location times volume is the core of effort-versus-result reading.

Context outranks anatomy

The same candle means different things at a weekly level versus the middle of nowhere, in a trend versus a range, on high participation versus none. Anatomy tells you what happened inside the window; only location and structure tell you whether it matters.

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