Quick take
- Each candle shows open, high, low and close for one period.
- Crypto trades 24/7, so most exchanges close the daily candle at 00:00 UTC.
- Patterns describe past trading; they are hints, not predictions.
One candle, four prices
Pick a timeframe, say one hour. For that hour, the candle's body runs from the opening price to the closing price, and thin wicks stretch up to the highest price and down to the lowest. A close above the open is usually drawn green; a close below, red.
When does a day start in crypto?
Stock charts start the daily candle when the exchange opens. Crypto has no opening bell, so most exchanges and charting tools close the daily candle at 00:00 UTC. A "daily close" in crypto conversations usually means that moment. Weekly candles commonly close on Sunday at 00:00 UTC, as Monday begins.
Reading what candles say
- Long body, small wicks: one side controlled the whole period.
- Long lower wick: sellers pushed down, buyers pushed back.
- Long upper wick: buyers pushed up, sellers pushed back.
- Tiny body: indecision.
Patterns you will hear about
| Pattern | Shape | Common reading |
|---|---|---|
| Doji | Open ≈ close | Balance, often before a change in pace |
| Hammer | Small body on top, long lower wick, after a fall | Buyers stepping in |
| Shooting star | Small body at the bottom, long upper wick, after a rise | Sellers stepping in |
| Engulfing | A body that covers the previous body | Momentum switching sides |
Add volume
Most exchange charts show volume bars under the candles. A big candle on high volume involved more trading than the same candle on thin volume, and tends to be taken more seriously. In crypto, remember that each exchange shows only its own volume.
Keep it in proportion
A pattern is a description of what just happened. It works better on longer timeframes and near important price levels, and fails often. Any trade still needs a planned exit and a size you can afford: see the crypto profit calculator and spot vs futures for the risks of leverage.
Common questions
Which timeframe should I use?
Longer timeframes such as four-hour or daily candles filter out much of the noise in crypto. Very short timeframes show constant, often meaningless, movement.
Why do charts on two exchanges look slightly different?
Each exchange has its own trades and prices, so highs, lows and volume differ a little between venues.