How to Read Candlestick Charts — Futures Chart Basics

What a single candle contains

One candle summarizes price action over a fixed period of time (one minute, one hour, one day, and so on).

• Open — the price at the start of that period
• Close — the price at the end of the period
• High — the highest price reached during that period
• Low — the lowest price reached

Up candles vs. down candles

• Up candle — the close is higher than the open (price rose). Usually shown in a light color or green.
• Down candle — the close is lower than the open (price fell). Usually shown in a dark color or red.

⚠ Colors depend on the platform and your settings. The global default — including on Merini — is typically green for up and red for down, but many platforms let you switch to the convention where rising prices are shown in red.

Body and wicks

• Body — the range between the open and the close. A longer body means the period had stronger directional conviction.
• Wick (or shadow) — the line extending above and below the body. It marks how far price traveled to the high or low before pulling back.

A long upper wick shows that price pushed higher but was rejected; a long lower wick shows that price dropped but found support and bounced.

Beginner patterns worth knowing

Pattern	Shape	Common interpretation (reference only)
Doji	Almost no body	Buyers and sellers are evenly matched → possible reversal
Hammer	Small body + long lower wick	Sometimes read as an attempt to bounce after a decline
Engulfing	The next candle fully covers the previous one	Sometimes read as a trend-reversal signal

Timeframes

The same price action looks different depending on which time unit you view it in. One-minute candles are noisy and full of small swings, while hourly and daily candles reveal the bigger picture. A common approach is to read the broader trend on a higher timeframe, then use a lower timeframe to gauge entry timing.

See one candle on three timeframes

The claim that the same price action looks different depending on the time unit is far easier to accept once you have watched it happen. In Merini’s free web demo you can open gold (XAUUSD) or the Nasdaq on live prices and step a single chart from one minute to one hour to daily, watching a dramatic long wick flatten into one ordinary body along the way. It opens with just an email, runs in the browser on virtual funds, and no order you place there reaches a broker → Step through the timeframes

Frequently asked questions

Is it okay to trade on patterns alone?

It is not recommended. Patterns are probabilistic context, not confirmed signals. Entering on a pattern alone, without a stop-loss, is risky. → Leverage and risk management

My candle colors look reversed. Why?

This comes from your platform’s up/down color setting. You can usually choose between the global convention (green for up) and the alternative where rising prices are shown in red.

Related reading → What are futures? · Futures trading hours explained · Glossary