How to read a candlestick chart – a beginner's guide
Green, red, body, wick, interval. In ten minutes you will understand what every candle on a crypto chart shows and how to pick the right time interval.
A candlestick chart only looks complicated until you realise that each candle answers four questions about one period of time: what was the price at the start, what was it at the end, how high did it go and how low did it fall. That is all.
Anatomy of a candle
Every candle has two parts:
- The body (the thick part) shows the opening and closing prices. The top and bottom of the body are exactly those two prices.
- The wicks (thin lines above and below the body, also called shadows) show the highest and lowest price during the period.
The colour tells you the direction:
- Green candle: the price rose. The bottom of the body is the open, the top is the close.
- Red candle: the price fell. The top of the body is the open, the bottom is the close.
A long body means a strong move in one direction. A short body with long wicks means the price swung around but ended close to where it started, a sign of indecision.
What an interval is
The interval is how much time fits into one candle. In the Crypto Hills simulator you can choose 1, 15, 30 or 60 minutes.
- 1-minute candles show every twitch. Useful for seeing what is happening right now, but full of noise; most moves mean nothing.
- 15 and 30-minute candles are a good compromise for intraday trading: you see the trend and can still react in time.
- 60-minute candles smooth out the noise and show where the price is heading over a day or several.
Beginners are better off starting with longer intervals. A one-minute chart encourages hasty decisions; a 60-minute chart teaches patience.
Three things to look at
- Direction. Are the recent candles mostly green or mostly red? Are their tops rising or falling? That is the trend. Trading against the trend is almost always a losing game for a beginner.
- Long wicks. A long lower wick means the price dropped hard but buyers pushed it back up. That often signals a support level where people are happy to buy. A long upper wick means the opposite.
- A sudden change in body size. If a row of small candles is followed by one very long one, something happened: news, a big trade, panic. That is a moment to wait for the market to calm down, not to jump in.
What the chart does not tell you
A chart shows the past. No pattern of candles guarantees what comes next. Experienced traders use the chart not to predict the future but to choose a better moment to enter and to decide in advance where they will exit if they are wrong.
The best way to learn candles is to look at them every day. Open Crypto Hills, pick one coin and check its 60-minute chart daily. After two weeks you will start to see things repeat.
When candles stop looking like chaos, you will notice your decisions have become calmer too. The chart no longer scares you; it just tells you what happened.