Bullish vs Bearish Candlesticks: A Beginner's Guide

Every candlestick tells a small part of the market story. Understanding how candles open and close is one of the first steps toward reading price action.

What Is a Bullish Candle?

A bullish candle forms when the closing price is higher than the opening price. Its body represents the distance between those two prices. Traders commonly display bullish candles in green or blue.

What Is a Bearish Candle?

A bearish candle forms when the closing price is lower than the opening price. Traders commonly display bearish candles in red. Candle colours are chart settings, not universal rules.

Understanding the Body and Wicks

The body shows the opening and closing prices. The upper wick reaches the highest traded price during the selected period, while the lower wick reaches the lowest price.

Why Does Candle Position Matter?

A strong-looking bullish candle does not automatically mean that the market will continue rising. Its meaning depends on the surrounding trend, support and resistance, liquidity, and the location of the candle within the market structure.

A Practical Reading Example

Imagine price falling toward a previously identified support area. A candle trades lower during the period but closes well above its low, leaving a long lower wick. This may indicate rejection of lower prices, but it is not sufficient by itself to confirm a reversal.

Key Takeaway

Learn to identify the open, high, low and close before studying more advanced patterns such as pin bars, engulfing candles, liquidity sweeps and order blocks.