Explainer
How to tell if a candle is bullish or bearish
A candle is bullish when it closes above its open and bearish when it closes below its open; if the two are equal it is neutral, often called a doji.
Updated
The one-line test
Compare the close with the open. If the close is above the open, the candle is bullish: price rose over the period. If the close is below the open, the candle is bearish: price fell.
The wicks do not decide it. Only the body does, and the body runs from the open to the close.
- Bullish candle
- A candle whose close is above its open.
- Bearish candle
- A candle whose close is below its open.
- Doji
- A candle whose open and close are equal or almost equal, so the body is a thin line.
- Gap
- A candle that opens away from the previous candle’s close instead of starting where it ended.
How to see it on a chart
Most charts colour the body for you. One colour means the close was above the open and the other means it was below. Green and red are common. Some charts use hollow and filled bodies, or white and black.
Colours are a setting. If you are unsure, hover over a candle and read its open and close. The numbers settle it.
When the colour is not about the open
Some charting platforms colour a candle by comparing its close with the previous candle’s close instead. A candle can then be coloured as rising even though it closed below its own open, if it opened with a gap down and closed above the previous close.
That is a choice about how to draw the chart, not a different definition of bullish. If you use the open-to-close test, check your platform’s colour setting so the picture and the definition agree.
Bullish and bearish describe what one candle did. They are not a prediction of the next one.
Size and wicks add detail
Two bullish candles can look very different. One has a long body and almost no wicks. Price opened low, rose steadily and closed near the high. Another has a short body and a long upper wick. Price rose, was pushed back, and closed only a little above its open.
Both are bullish by the one-line test. Traders read the second as less decisive than the first. That is an interpretation, and it is one thing among many to look at.
Why a single candle is not a signal
A bullish candle only says that this period closed higher than it opened. Many bullish candles appear inside falling markets and many bearish ones inside rising markets.
People usually look at several candles, at the level where they appear, and at the timeframe. If you want to know what has followed a particular candle, write the condition as an exact rule and test it on past data. The candle alone cannot answer it.
The futures angle
On a futures chart, a bar is labelled by the time it opens, and the first bar of a session opens at 18:00 ET. A bar that opens at a new session or right after a contract roll can start away from the previous close. That gap can make the colour on a chart different from the open-to-close test.
Our data is 1-minute bars. Longer candles are built from them, so a daily candle’s open is the first 1-minute bar’s open and its close is the last bar’s close. Replay it on real NQ data, free, in the Trade Lab.
Questions and answers
How do you know if a candle is bullish or bearish?
Compare the close with the open. Close above open is bullish. Close below open is bearish.
What does a green or red candle mean?
On most charts it shows direction: one colour when the close is above the open, the other when it is below. The colours are a platform setting, so check yours.
What is a doji candle?
A candle whose open and close are the same or very close, so it has almost no body. It is neither clearly bullish nor bearish.
Does a bullish candle mean price will go up next?
No. It only describes the period it covers. The next candle can go either way.
Do the wicks matter when deciding bullish or bearish?
Not for the definition. The body decides it. Wicks add detail about how far price travelled and came back.