How do I read a candlestick chart?

A candlestick chart is a common tool used in technical analysis to represent price movements of an asset over a specific period. Each candlestick displays four key prices: the opening price, closing price, highest price, and lowest price within a given timeframe. The body of the candlestick is formed between the opening and closing prices, and its color indicates market sentiment—typically green (or white) for an upward movement and red (or black) for a downward movement. The wicks extend from the body to represent the highest and lowest prices reached during that timeframe. To interpret candlestick patterns, traders often look for formations that suggest potential market direction, such as doji, hammer, or engulfing patterns.