In the previous article, you learned what candlestick charts are and why traders worldwide prefer them over every other chart type. Now it’s time to go deeper. Before you can read patterns, spot reversals, or time entries, you need to understand every part of a single candlestick — because every trading signal starts here.
Quick Answer: Every candlestick has four points: Open, High, Low, Close. Body = open-to-close range. Wicks = high and low extremes. Body size shows conviction, wick length shows rejection.
Think of a candlestick the way a doctor thinks of a blood report. A single report has multiple data points — haemoglobin, white blood cells, platelets — and each one tells a different story about the patient’s health. Similarly, a single candlestick has multiple data points — open, high, low, close — and each one tells a different story about what buyers and sellers did during that time period.
This article breaks down every element of a candlestick in detail, using real NSE price examples that you can verify on TradingView or Zerodha Kite. By the end, you’ll be able to look at any candle and decode the battle between buyers and sellers that it represents.
The Four Building Blocks: O, H, L, C
Every single candlestick — on any chart, any timeframe, any instrument — is built from exactly four prices. These are universally abbreviated as OHLC: Open, High, Low, and Close.
Open (O) — Where the Battle Begins
The Open is the price of the very first trade when the candle’s time period starts. On a daily chart of any NSE stock, the Open is the price at 9:15 AM IST when the pre-market session ends and continuous trading begins. On a 15-minute chart, the Open is the price at the start of each 15-minute block.
Why the Open matters: it sets the starting position for the period’s battle between buyers and sellers. Everything that follows — the range of the candle, the direction of the body, the length of the wicks — is measured relative to this starting price.
On a bullish candle, the Open becomes the bottom of the body. On a bearish candle, the Open becomes the top of the body. This is a critical distinction that trips up many beginners. The Open doesn’t have a fixed position on the candle — it depends on whether the candle closed higher or lower.
High (H) — The Ceiling of Ambition
The High is the absolute highest price reached during the entire candle period. If you’re looking at a daily candle of Reliance Industries and the stock touched ₹2,550 at 11:32 AM before falling back, that ₹2,550 is recorded as the High — even though the stock spent only a few seconds at that price.
The High represents the maximum point of bullish ambition during the period. Buyers pushed price up to this level — and then sellers stepped in and pushed it back down. The distance between the High and the top of the body (the upper wick) tells you how much of that ambition was rejected.
A candle where the High equals the Close (no upper wick on a bullish candle) means buyers pushed price up and sellers couldn’t push it back at all. That’s extremely bullish — buyers maintained full control right up to the close.
Low (L) — The Floor of Fear
The Low is the absolute lowest price reached during the candle period. If Infosys dropped to ₹1,415 at 2:47 PM during a sell-off before bouncing back, that ₹1,415 is the Low.
The Low represents the maximum point of bearish pressure during the period. Sellers pushed price down to this level — and then buyers defended it and pushed the price back up. The distance between the Low and the bottom of the body (the lower wick) tells you how much of that selling pressure was absorbed.
A candle where the Low equals the Close (no lower wick on a bearish candle) means sellers pushed price down and buyers couldn’t recover any ground. That’s extremely bearish — sellers maintained complete control.
Close (C) — The Verdict
The Close is the price of the last trade when the candle’s time period ends. For daily candles on the NSE, this is the price at 3:30 PM IST. For index derivatives, it’s technically the volume-weighted average of the last 30 minutes.
The Close is the most important of the four prices. Here’s why: the Close tells you who won the battle. If the Close is above the Open, buyers won — it’s a bullish candle. If the Close is below the Open, sellers won — it’s a bearish candle. If the Close equals the Open (or is very close), neither side won — that’s a doji, signalling indecision.
Many professional traders care more about the Close than any other data point. The Close determines the candle’s colour, the direction of the body, and ultimately the signal the candle gives. A stock can trade wildly during the day, but if it closes near its high, the daily candle will look bullish regardless of what happened in between.
The Body: Where the Real Story Lives
The body (also called the real body) is the thick rectangular part of the candlestick. It represents the range between the Open and Close prices — the actual ground gained or lost by the end of the period.
Large Body = Strong Conviction
When the body is tall relative to recent candles, it means there was a significant price difference between the Open and Close. A tall green body means buyers pushed the price substantially higher. A tall red body means sellers pushed it substantially lower.
Consider this: HDFC Bank opens at ₹1,700 and closes at ₹1,740. That’s a ₹40 move in the body — a strong bullish candle. But if HDFC Bank typically moves ₹10-15 per day, this ₹40 body is exceptionally large and signals unusual buying conviction. Context matters — always compare body size to recent history.
Large body candles often appear at breakout points. When a stock finally breaks above resistance that has held for weeks, the breakout candle usually has a large body — it shows that buyers overwhelmed the selling pressure at that resistance level with force.
Small Body = Indecision
A small body means the Open and Close were very close together. Buyers and sellers fought, but neither gained meaningful ground. Small-body candles (called spinning tops when they have moderate wicks on both sides) signal indecision.
But indecision isn’t always neutral. If you see a series of tall green candles followed by a small-body candle, that’s a warning. The uptrend’s momentum is fading. Buyers are losing their dominance. It doesn’t mean the trend is over, but it means caution is warranted.
Similarly, small-body candles near major support or resistance levels often precede breakouts. The small bodies represent the equilibrium before one side overwhelms the other.
No Body (Doji) = Deadlock
When the body is essentially a flat line (Open equals Close), you have a doji. This is the ultimate expression of indecision — buyers and sellers fought to a draw. Doji candles are among the most important signals in candlestick analysis, especially when they appear after extended trends. We’ll dedicate an entire article to doji variations.
Body Position Within the Range
Where the body sits within the candle’s total range (High to Low) tells an additional story. If a bullish candle’s body sits at the very top of the range (close to the High), buyers maintained control throughout. If the body sits in the lower half of the range, buyers won but had to fight hard — sellers pushed them down at some point during the session.
This is why a green candle with a large lower wick is different from a green candle with no wick at all. Both are bullish, but the one with no wick shows more decisive bullish control.
The Upper Wick: Rejection from Above
The upper wick (also called upper shadow) extends from the top of the body to the High of the candle. It represents the distance between the highest price reached during the period and the higher of the Open or Close.
What the Upper Wick Tells You
A long upper wick means that price was pushed higher during the session but couldn’t stay there. Buyers tried to take the price up, but sellers stepped in at that higher level and pushed it back down. The longer the upper wick, the stronger the selling pressure was at those higher levels.
Think of it like this: the upper wick is a record of a failed bullish attempt. Price reached up to the High, met resistance (selling), and fell back. The wick is the scar left behind.
Practical Example
Tata Motors opens at ₹620, rallies to ₹645 during the session, but sellers push the price all the way back down, and it closes at ₹625. The body is small (₹620 to ₹625 = ₹5), but the upper wick is massive (₹625 to ₹645 = ₹20). That ₹20 upper wick tells you there’s strong selling pressure between ₹635 and ₹645. If you were planning to buy Tata Motors, this candle warns you that sellers are active at those levels.
When Upper Wicks Signal Reversals
Long upper wicks are most significant when they appear at resistance levels or at the top of an uptrend. A candle with a small body and a long upper wick at a known resistance level (say, Nifty at 23,000 after multiple failed attempts to break through) is a strong bearish warning. It means buyers tried to break through, failed, and sellers pushed back aggressively.
The shooting star pattern is essentially a candle with a very long upper wick, small body, and little or no lower wick that appears at the top of an uptrend. It’s one of the most reliable bearish reversal signals in candlestick analysis.
When to Ignore Upper Wicks
In a strong uptrend, small upper wicks are normal. They show minor profit-taking — some traders selling into strength — but as long as the bodies remain large and green, the trend is healthy. Only worry about upper wicks when they’re unusually long relative to the body, or when they appear at key resistance levels.
The Lower Wick: Rejection from Below
The lower wick (also called lower shadow) extends from the bottom of the body to the Low of the candle. It represents the distance between the lowest price reached and the lower of the Open or Close.
What the Lower Wick Tells You
A long lower wick means that price was pushed lower during the session but recovered. Sellers tried to take the price down, but buyers stepped in at that lower level and pushed it back up. The longer the lower wick, the stronger the buying pressure was at those lower levels.
The lower wick is a record of a failed bearish attempt. Price was pushed down to the Low, met demand (buying), and bounced back. The wick shows where buyers drew a line in the sand.
Practical Example
SBI opens at ₹780, drops to ₹755 during a mid-session sell-off as markets panic, but buyers step in and the stock recovers to close at ₹778. The body is tiny (₹780 to ₹778 = just ₹2 red), but the lower wick is enormous (₹778 to ₹755 = ₹23). That lower wick tells you there’s strong buying interest below ₹760. The market tried to take SBI below ₹760 and got decisively rejected.
When Lower Wicks Signal Reversals
Long lower wicks at support levels or at the bottom of a downtrend are powerful bullish signals. They mean sellers tried to break support and failed — buyers defended that level aggressively.
The hammer pattern is a candle with a small body at the top, little or no upper wick, and a very long lower wick (at least 2x the body length) that appears at the bottom of a downtrend. It’s one of the most reliable bullish reversal signals because it proves that buyers overwhelmed sellers at that level.
Consider a scenario: Nifty 50 has been falling for 5 sessions, dropping from 22,500 to 21,800. On the 6th day, it opens at 21,800, drops to 21,600 during panic selling, but then rallies sharply to close at 21,780. That daily candle has a long lower wick — buyers defended the 21,600 level. If this level aligns with a prior support zone, the signal is even stronger.
When to Ignore Lower Wicks
In a strong downtrend, small lower wicks are normal. They represent temporary buying (maybe short-covering or bargain hunting) that doesn’t change the overall direction. Only pay attention when the lower wick is unusually long or appears at a clear support level.
Wick-to-Body Ratios: The Hidden Signal
One of the most useful skills in candlestick analysis is comparing the length of the wicks to the length of the body. This ratio reveals the balance of power between buyers and sellers in a way that body size alone cannot.
Ratio 1: Large Body, Small Wicks
This is the most decisive candle type. Buyers (or sellers, if bearish) controlled the entire session. Price moved from Open to Close with minimal pushback. Example: a large green candle with tiny wicks at both ends. This shows that buyers dominated from open to close and sellers couldn’t muster any meaningful resistance.
These candles are called Marubozu when the wicks are completely absent. They represent the strongest possible bullish or bearish statement.
Ratio 2: Small Body, Large Wicks
This is the most indecisive candle type. Price moved dramatically during the session (long wicks = big range), but the final result (Open vs Close) was almost nothing. The battle was intense, but the result was a draw.
These candles are called spinning tops or doji (if the body is nearly zero). When you see them at trend extremes, they’re powerful reversal warnings.
Ratio 3: Small Body, One Long Wick
This is the reversal signal candle. One side tried hard (long wick in one direction) but completely failed (small body in the opposite direction).
Long lower wick + small body at top = Hammer (bullish at bottom of downtrend) Long upper wick + small body at bottom = Shooting Star (bearish at top of uptrend)
These single-wick candles are among the most actionable signals in technical analysis because they clearly show one side being overpowered.
Ratio 4: Large Body, One Long Wick
This shows conviction with a caveat. For example, a large green body with a long upper wick. Buyers won the session (large green body), but they faced significant selling at the highs (long upper wick). It’s bullish, but the long wick suggests there’s resistance above. The next few candles will tell you whether buyers can overcome that selling pressure.
How Body Size Changes Across Market Conditions
Candle body size isn’t constant — it varies based on market volatility, news events, and the current phase of the trend.
During Strong Trends
In a healthy uptrend, you’ll see mostly large green bodies with small wicks. Each day, buyers push the price meaningfully higher. The consistency of large bodies confirms the trend’s strength. When the bodies start shrinking (getting smaller even though the trend continues), that’s an early warning — momentum is fading.
During Ranging Markets
In a sideways market, you’ll see a mix of small green and red bodies, often with relatively long wicks on both sides. This reflects the back-and-forth battle within the range. Neither buyers nor sellers can gain a sustainable advantage.
During Breakouts
Breakouts produce some of the most dramatic candles. When Nifty has been consolidating between 22,000 and 22,500 for weeks and suddenly breaks above 22,500 on strong volume, the breakout candle will typically have a very large green body — sometimes 100+ points on Nifty — with minimal wicks. This is the market telling you that a new directional move has begun.
During Earnings and News Events
Major news (earnings results, RBI policy, global events) can create abnormally large candles — sometimes 2-3x the normal daily range. These “outside range” candles signal a shift in the market’s assessment of the stock’s value. Treat them with respect — the direction of a large news-driven candle often sets the tone for the next several sessions.
Putting It All Together: Reading a Real Candle
Let’s decode a hypothetical but realistic daily candle on ICICI Bank.
The candle data: Open ₹1,120, High ₹1,145, Low ₹1,108, Close ₹1,138.
Step 1: Determine the colour. Close (₹1,138) is higher than Open (₹1,120). This is a green (bullish) candle. Buyers won.
Step 2: Measure the body. Body = Close – Open = ₹1,138 – ₹1,120 = ₹18. If ICICI Bank’s average daily body size over the past 20 days has been ₹10-12, this ₹18 body is above average — stronger-than-normal buying.
Step 3: Measure the upper wick. Upper wick = High – Close = ₹1,145 – ₹1,138 = ₹7. Moderate upper wick — some selling at the highs, but not excessive.
Step 4: Measure the lower wick. Lower wick = Open – Low = ₹1,120 – ₹1,108 = ₹12. Notable lower wick — at some point during the day, sellers pushed price ₹12 below the open. But buyers recovered all of it and then some.
Step 5: Interpret the story. Early in the session, sellers tried to push ICICI Bank down (hence the ₹12 lower wick). Buyers fought back, not only recovering the lost ground but pushing the price ₹18 above the open. There was some profit-taking near the highs (₹7 upper wick), but the overall message is clearly bullish. Buyers absorbed the early selling and dominated the session.
Step 6: Context check. Is ICICI Bank in an uptrend? Is this candle forming at a key support level? Is the volume above average? If yes to these, this candle confirms bullish continuation. If it’s forming at resistance after a long rally, the upper wick might warrant caution.
The Difference Between Candle Size and Candle Significance
A common mistake is assuming that bigger candles are always more important. That’s not true. A small hammer at a major support level after a 15% decline is far more significant than a large green candle in the middle of an ongoing uptrend.
Significance comes from context, not size. A candle becomes significant when it appears at a key location: support, resistance, a moving average, a trendline, or a Fibonacci retracement level. The combination of the candle’s shape (body + wicks) with its location in the chart is what creates actionable trading signals.
A large candle with a long wick at a random location in the middle of a range might mean nothing. But a small doji right at the 200-day EMA after a 20-day downtrend? That could be the turning point of the entire move.
Always ask yourself: “Where is this candle on the chart? Is it at a level that matters?” If the answer is no, the candle is just noise.
Practise Exercise: Decode 5 Candles
Here are five candle descriptions. Before reading the interpretation, try to decode each one yourself.
Candle 1: Open ₹500, High ₹502, Low ₹460, Close ₹497. Interpretation: Red candle (Close < Open) with a tiny body (₹3) and a massive lower wick (₹37). This is a dragonfly doji / hammer. Despite heavy selling down to ₹460, buyers recovered almost everything. Strongly bullish signal at support.
Candle 2: Open ₹300, High ₹340, Low ₹298, Close ₹305. Interpretation: Green candle with a small body (₹5) and a very long upper wick (₹35). This is a shooting star / gravestone-like pattern. Buyers tried hard to push higher but were overwhelmed by sellers. Bearish warning at resistance.
Candle 3: Open ₹750, High ₹800, Low ₹748, Close ₹795. Interpretation: Large green body (₹45) with very small wicks. This is a bullish Marubozu. Buyers dominated from open to close with zero meaningful pushback. Strong bullish conviction.
Candle 4: Open ₹200, High ₹215, Low ₹185, Close ₹201. Interpretation: Tiny green body (₹1) with long wicks on both sides. This is a spinning top / long-legged doji. Price ranged ₹30 during the session but ended almost unchanged. Maximum indecision.
Candle 5: Open ₹1,000, High ₹1,005, Low ₹950, Close ₹955. Interpretation: Red candle with a moderate body (₹45) and a small lower wick. Bearish — sellers pushed price down meaningfully with minimal buyer resistance. If this appears after an uptrend, it’s a warning.
Key Takeaways
Every candlestick is built from four prices: Open, High, Low, and Close. The Open and Close form the body — the most important part of the candle. The High and Low form the wicks, which reveal rejected price levels.
The body tells you who won (buyers or sellers) and by how much (size of the body). The wicks tell you about failed attempts — long upper wicks show sellers rejecting higher prices, long lower wicks show buyers defending lower prices. The wick-to-body ratio reveals the balance of power during the session.
Body size matters only relative to recent history. Compare today’s body to the average of the last 10-20 candles to gauge whether the move is unusually strong or weak. And always remember that a candle’s significance depends on where it appears on the chart — not just its shape.
Master this anatomy, and you’ll be ready to learn specific candlestick patterns that build on these fundamental elements.
Useful Resources: TradingView (chart analysis) | Zerodha Varsity Candlestick Module (reference) | NSE India (live data)
Frequently Asked Questions
What is OHLC in a candlestick chart? OHLC stands for Open, High, Low, and Close — the four prices that make up every candlestick. Open is the first trade price, High is the maximum price reached, Low is the minimum price reached, and Close is the last trade price for that time period. Together, they create the body and wicks of each candle.
Which part of a candlestick is most important? The Close is generally considered the most important data point because it determines who won the session — buyers or sellers. The Close decides the candle’s colour (green or red) and is the price that most technical indicators use in their calculations. However, for trading decisions, the relationship between all four prices matters.
What does a long wick mean on a candlestick? A long wick indicates rejection. A long upper wick means price was pushed higher but sellers rejected it and pushed it back down — showing selling pressure at those higher levels. A long lower wick means price was pushed lower but buyers defended and pushed it back up — showing buying support at lower levels.
Why does the body size of a candlestick change? Body size reflects market volatility and conviction. During strong trends, bodies tend to be large because one side dominates. During sideways markets, bodies are smaller because neither side gains an advantage. News events and earnings announcements can create abnormally large bodies due to sudden shifts in supply and demand.
What is the difference between a wick and a shadow? Nothing — they’re the same thing. “Wick” and “shadow” are interchangeable terms for the thin lines above and below the candle body. “Upper wick” = “upper shadow.” Some texts also call them “tails.” All three terms refer to the same element.
How do I compare candlestick body sizes? Compare today’s body size to the average body size of the last 10-20 candles on the same timeframe. If today’s body is 2x or more than the average, it signals unusually strong conviction. If it’s less than half the average, it signals weakening momentum or indecision. Most charting platforms like TradingView can show this with the ATR indicator.
Does the colour of a candlestick matter more than the wick? Both matter, but for different reasons. The colour tells you direction (who won), while the wicks tell you about the process (how the battle unfolded). A red candle with a very long lower wick at support is actually more bullish than bearish — the wick shows strong buyer defence despite the session closing slightly lower. Always read both together.
Related Articles You Should Read Next
What are the four parts of a candlestick?
Every candlestick has four data points: Open (the first traded price), High (the maximum price reached), Low (the minimum price reached), and Close (the last traded price). These four values create the body and wicks of the candle.
What is the body of a candlestick?
The body is the thick rectangular part of a candlestick that represents the range between the opening and closing prices. A large body indicates strong buying or selling pressure, while a small body suggests indecision between buyers and sellers.
What do the wicks or shadows of a candlestick tell you?
Wicks (also called shadows) are the thin lines extending above and below the body. The upper wick shows the highest price reached before sellers pushed it back down, and the lower wick shows the lowest price reached before buyers pushed it back up.
What is the difference between a bullish and bearish candlestick?
A bullish candlestick closes higher than it opens (the close is above the open), typically shown in green. A bearish candlestick closes lower than it opens (the close is below the open), typically shown in red.
How do you read a single candlestick for trading?
Look at three things: the body size (large body = strong momentum, small body = indecision), the wick lengths (long wicks = rejection of price levels), and the colour (green = bullish, red = bearish). Together, these tell you who won the battle between buyers and sellers.