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Every candlestick chart is answering the same four questions for every stretch of time it shows: where did the price start, where did it end, how high did it reach, and how low did it fall. Once you can read those four numbers off a single candle, the rest of chart reading is just pattern recognition — this guide walks through it in order, with diagrams from the same chart you'll see on Soku Trade.
A price chart has two axes. The horizontal axis is time — it runs left to right, oldest to newest, and it's divided into equal slices (one minute, five minutes, one day — whatever the chart's timeframe is set to). The vertical axis is price. Every candle sits at the time slice it belongs to and at the price level it traded. That's the entire coordinate system: find a candle's position left-to-right for when, and its position bottom-to-top for what price.
Each candle summarizes one time slice using four prices, often shortened to OHLC: Open, High, Low, and Close. The thick rectangle is the candle's body — its top and bottom mark the open and the close (which edge is which depends on direction, covered below). The thin lines above and below the body are wicks(also called shadows) — they mark the high and the low, the most extreme prices the candle touched during that slice, even if price didn't stay there.
A long wick tells you price tried to go further and got rejected. A short or missing wick tells you price moved in mostly one direction with little pushback.
A candle is bullishwhen it closes above where it opened — buyers were in control for that slice. It's bearishwhen it closes below where it opened — sellers were in control. Soku Trade's charts color bullish candles green and bearish candles red, which is the same convention you'll see on most trading platforms.
One candle tells you almost nothing on its own. A trend is what a sequence of candles is doing over time, and traders describe that sequence using its swing highs and swing lows — the local peaks and valleys the price carves out as it moves.
An uptrend is a series of higher highs (each peak tops the last one) and higher lows(each pullback stops above the last pullback's low). As long as that pattern holds, buyers are pushing the market up faster than sellers can pull it back.
A downtrend is the mirror image: a series of lower highs (each bounce fails to reach the last peak) and lower lows(each new low undercuts the last one). The first time a downtrend prints a higher high, or an uptrend prints a lower low, that's usually the earliest technical sign the trend is changing.
Support is a price level where buying has repeatedly shown up and stopped price from falling further. Resistanceis a price level where selling has repeatedly shown up and capped price from rising further. When price bounces between a support level below and a resistance level above without breaking either one, it's trading in a range.
A breakout is a move above resistance; a breakdown is a move below support. Both are watched closely because a level that has held multiple times, once broken, often flips roles — old resistance can become new support on a breakout, and old support can become new resistance on a breakdown.
Volume is the number of contracts traded in a given time slice, usually shown as bars beneath the price chart. Volume measures conviction: a breakout on heavy volume suggests broad participation and is more likely to hold, while the same breakout on thin volume is easier to reverse. A big price move on unusually low volume is a common warning sign that a move may not have real support behind it.
The same instrument looks different depending on how much time each candle represents. A 1-minute chart shows the same market as a 1-day chart, just zoomed in far enough that ordinary noise looks like a major move. Shorter timeframes show more detail and more false signals; longer timeframes filter out noise but react slower.
Many traders check more than one timeframe before acting: a longer timeframe (say, daily or 1-hour) to judge the dominant trend, and a shorter timeframe (say, 5-minute) to time an entry within that trend. Trading against the longer-timeframe trend is possible, but it's a different, higher-risk strategy than trading with it.
| Term | Meaning |
|---|---|
| OHLC | Open, High, Low, Close — the four prices a candle encodes |
| Wick / shadow | The thin line marking a candle's high or low |
| Swing high / low | A local peak or valley in price |
| Support | A price floor where buying has repeatedly shown up |
| Resistance | A price ceiling where selling has repeatedly shown up |
| Breakout | Price closing above resistance |
| Breakdown | Price closing below support |
| Range | Price moving between support and resistance without breaking either |
| Volume | How many contracts traded during a time slice |
| Timeframe | How much time a single candle represents |
Say MES has spent an afternoon bouncing between 5,780 (support) and 5,800 (resistance) — a range. Volume has been average. Then a candle closes at 5,806 on volume noticeably higher than the rest of the session: that's a breakout, backed by conviction. Under the trend-structure rules above, if the next pullback holds above the old 5,800 resistance instead of falling back into the old range, that's the level flipping from resistance to support — one more piece of evidence, not a guarantee, that buyers are still in control.
Ready to see this on a live chart? Soku Trade's price charts update with real market data, and every trade you place there is paper money — free to practice, nothing at risk.
Practice reading charts on Soku Trade