Reading the chart

Candles and volume: how to read a stock chart

The default chart on every stock page is a candlestick chart. It looks busy at first, but each candle answers four simple questions about one period of trading (one day on the 3M view and longer, one hour or five minutes on the shorter ones): where did the price start, how high did it go, how low did it go, and where did it end?

Equinor over the last three months. Each candle is one trading day; the bars along the bottom are the volume.

One candle, four prices

• Open: the first trade of the period.
• Close: the last trade of the period. This is the price most people mean when they say what a stock "is at".
• High and low: the highest and lowest trades in between.

The thick part, the body, runs from the open to the close. The thin lines above and below it, the wicks (also called shadows), reach up to the high and down to the low.

Green and red

A green candle closed higher than it opened: buyers were in control that day. A red candle closed lower than it opened. The colour says nothing about the day before: a red candle can still close above yesterday's close if the stock opened with a jump and then slid back.

What the shape tells you

• A long body means the price travelled a long way in one direction during the period. It was a decisive day.
• A small body with long wicks means the price swung around and ended up near where it started. Buyers and sellers were undecided.
• A long upper wick means the price was pushed up but couldn't stay there: sellers stepped in. A long lower wick is the opposite: buyers stepped in at the lows.

Tip: Hover over a candle (or tap it on a phone) and the line above the chart shows its exact open, high, low, close and volume.

Volume: how many shares changed hands

The bars along the bottom show the volume: how many shares were traded in each period, coloured like the candle above. Volume tells you how much conviction is behind a move. A big price move on high volume means many traders agreed; the same move on very low volume may just be a few trades in a quiet market and says much less.

Volume often jumps on days with news, such as quarterly results. On the ticker board, the RelVol column compares today's volume with the stock's normal level, so you can spot unusual days at a glance.

Try it

Open Equinor's chart

Find the biggest green and red candles on the chart, then look at the volume under them. Were the biggest moves also the busiest days? Switch the range to 1D to see the same idea with five-minute candles.

Where it misleads

A single candle is one period of trading, nothing more. Patterns with names like "hammer" or "doji" are popular, but on their own they predict very little. Use candles to understand what happened, and read them together with the trend and the news rather than as signals by themselves.

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