Direct answer
A worked example of a candlestick chart shows, step by step, how the four prices of one time interval—open, high, low, and close—map into a single candlestick (body and wick), and how those shapes can be read without assuming future direction.
Because the term “worked example” can mean different things, this article uses one concrete numerical scenario. It does not use live prices, and it states every assumption needed for the calculations.
Mechanism or definition
A candlestick chart is built from repeated time intervals (for example, 1 hour, 15 minutes, or 1 day). For each interval, you typically record:
- Open: the first observed price in the interval.
- High: the highest observed price in the interval.
- Low: the lowest observed price in the interval.
- Close: the last observed price in the interval.
Candlestick geometry (the stable mechanics):
- The body is the range between open and close.
- The upper wick extends from the body top to the high.
- The lower wick extends from the body bottom to the low.
- The color or direction convention is defined by whether close is above or below open (the exact naming varies by charting platform, but the calculation logic does not).
Key variable choices (the parts that can differ by market and provider):
- The time interval you choose changes what “open/high/low/close” means.
- Different data feeds or price conventions can change the numbers you see, especially for short intervals.
Evidence or example (worked numeric scenario)
Assumptions (made explicit):
- We are building candlesticks for a fixed interval of one hour.
- The following four prices are the complete set of observations for that hour (no missing data):
- Open = 1.2000
- High = 1.2050
- Low = 1.1950
- Close = 1.2020
- We use a common convention: the candlestick is “bullish” if close ≥ open, otherwise “bearish.” (We do not rely on any platform-specific wording beyond that convention.)
Step 1: Determine direction from open and close
- Close (1.2020) is higher than Open (1.2000).
- Therefore, the body runs from 1.2000 to 1.2020.
Step 2: Determine wick positions from high and low
- Upper wick extends from the body top (1.2020) up to the High (1.2050).
- Lower wick extends from the body bottom (1.2000) down to the Low (1.1950).
Step 3: Compute simple measurements you can verify
- Body size = Close − Open = 1.2020 − 1.2000 = 0.0020
- Total range (high to low) = High − Low = 1.2050 − 1.1950 = 0.0100
- Wick sizes:
- Upper wick = High − Close = 1.2050 − 1.2020 = 0.0030
- Lower wick = Open − Low = 1.2000 − 1.1950 = 0.0050
What this example tells you (without predicting):
- The hour’s price action moved through a larger overall range than the net change between open and close.
- The close ended above open, but both upper and lower wicks show that prices tested higher and lower levels during the interval.
Limitations and risks (material failure modes)
- Timeframe sensitivity: The same underlying market behavior can produce very different candle shapes when you change the interval. A “small body with long wicks” on one timeframe may look different on another.
- Data quality and definition differences: If your high/low/close values come from different feeds, rounding rules, or platform conventions, the candle geometry may change.
- Misreading shape as a standalone signal: Candlestick appearance describes what happened inside an interval; it does not, by itself, establish what will happen next.
- Market microstructure and execution effects: Even if a chart shows a wick reversal or a strong close, real outcomes depend on how trades are executed, costs, and timing. This is especially relevant in fast-moving conditions.
These limitations mean that candlesticks should be treated as a structured way to summarize price history, not as a guarantee of future direction.
Verification and next question
You can independently verify the worked example by reconstructing the same four numbers into a charting tool or spreadsheet that plots open/close as the body and high/low as wicks. If your plotted geometry matches the computed body and wick sizes, the mechanics are consistent.