What is a candlestick chart?
A candlestick chart is a chart type that shows the price movement of a crypto asset over a specific time interval as a single visual block. Each "candle" presents the open, close, highest and lowest price information of that period at the same time. It is the most widely used chart type in technical analysis and lets users quickly read the periods when price was strong or weak.
How is a candlestick chart read?
Each candle holds four basic price points:
- Open: The first price traded at the start of the period
- Close: The last price traded at the end of the period
- High: The highest price seen throughout the period
- Low: The lowest price seen throughout the period
A candle consists of two components:
- Body: The rectangular area between the opening and closing prices
- Wick (shadow): The lines seen above and below the body; they show the highest and lowest prices in that period
Candle colours
Candles are usually shown in two colours:
- Green (bullish candle): Close is higher than open; price increased during that period
- Red (bearish candle): Close is lower than open; price decreased during that period
This colour convention is applied to the candles displayed on the Chart tab in the Paribu app, so investors can quickly read the trend direction.
Candle types and what they tell
The look of candles gives clues about the buyer-seller balance in the market:
- Long green-bodied candle: Strong buying pressure; a steady rising period
- Long red-bodied candle: Strong selling pressure; a clearly falling period
- Short-bodied candle (doji): Open and close are very close; indecision in the market
- Long upper wick: Price tested higher but sellers pushed it back; can be a resistance signal
- Long lower wick: Price went down but buyers reacted; can be a support signal
The combination of these basic types forms the candle formations that technical analysts study (such as hammer, engulfing and morning star).
Time frames
In candlestick charts, the time each candle represents can be selected differently. Common time frames are available on Paribu's Chart tab:
| Interval | Use |
|---|---|
| 1 minute – 15 minutes | Short-term scalping |
| 30 minutes – 1 hour | Intraday trading |
| 4 hours | Daily trend analysis |
| 1 day | Mid and long-term |
| 1 week – 1 month | Long-term perspective |
Short time frames contain more noise; longer intervals show the general trend more clearly.
Difference from a line chart
A line chart shows only a single line connecting the closing prices. The candlestick chart, on the other hand, carries more information because it presents the open, close, high and low for each period together. Users who want to examine price behaviour in detail in technical analysis usually prefer the candlestick chart.
Note: In the Paribu app, on the Market Detail page Chart tab, you can switch between three chart types: candlestick, line and depth. When the candlestick chart is selected, the VOL, RSI, EMA, MA, BOLL and MACD indicators can be activated.
When evaluated on their own, candlestick charts can give misleading signals. For more reliable results, it is important to use multiple indicators together.
Note: Evaluating multiple time frames and additional indicators together provides a healthier analysis than making decisions based on a single candle or a short series.
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Paribu