BEGINNER · CHAPTER 01
Candles & Price Movement
The learner can identify what a candle records, distinguish body, wick and range, compare candles without relying on colour, recognise incomplete information, and read one candle inside a chart without turning observation into certainty.
One candle, one completed period
Understand what one candle represents.
A candle compresses the price activity assigned to one chart period. On a Daily chart it represents one trading day; on a 5-minute chart it represents five minutes. The shape changes as price trades, then becomes a historical record when the period closes.
The timeframe changes the detail
Recognise that the same market looks different at different resolutions.
Shorter timeframes divide price into more candles and reveal more internal movement. Longer timeframes compress the same span into fewer candles and make broader movement easier to see. Neither view is automatically more truthful; they answer different questions.
Four prices define the candle
Identify open, high, low and close.
The open is the first recorded price in the period. The high and low are the furthest prices reached, and the close is the final recorded price. Together these four values are called OHLC.
Bullish, bearish and unchanged
Classify direction from open and close.
A bullish candle closes above its open. A bearish candle closes below its open. If open and close are equal or nearly equal, the body is very small and the period finished close to where it began.
The body is the net move
Understand what the body measures.
The body spans the distance between open and close. It shows the period’s net directional movement, not every movement inside the period. A larger body means a larger open-to-close change in the chart’s price scale.
Wicks record the extremes
Read upper and lower wicks accurately.
The upper wick extends from the top of the body to the period high. The lower wick extends from the bottom of the body to the period low. A wick shows that price traded there before finishing elsewhere.
Range is high to low
Separate total range from body size.
A candle’s total range is the distance from high to low. The body may occupy most of that range or only a small part. Comparing body and range helps describe whether the period finished directionally or travelled widely before returning.
Where the close sits matters
Describe close location without overclaiming.
The close can finish near the high, near the low or around the middle of the range. This shows where the period ended relative to all prices traded during it. It is a useful description of the completed contest, not proof of the next outcome.
Body proportion adds context
Compare the body with the total range.
A body filling most of the range means the open and close are far apart relative to the extremes. A small body inside a large range means price travelled widely but finished near its start. Both are descriptive measurements rather than named predictions.
The candle hides the route
Understand intraperiod ambiguity.
OHLC preserves four values but not the exact order of every movement between them. Price might visit the low first and the high later, or the high first and the low later, while producing the same final candle.
A gap is not a wick
Distinguish the current open from the previous close.
A new candle may open above or below the previous candle’s close. The empty price distance between them is a gap on that chart. A wick belongs to one candle’s own high–low range; a gap compares separate periods.
One candle belongs to a sequence
Place candle observations inside surrounding price action.
The same candle can carry different significance depending on what came before and what follows. Context includes trend structure, nearby levels, relative range and later acceptance. First read the candle accurately; then add the surrounding chart.
Direction and activity are different
Avoid confusing a large candle with high trading activity.
Candle range and body measure price movement. Volume, when available, measures recorded trading activity. A wide candle may occur on ordinary volume, and a narrow candle may occur on exceptional volume.
A live candle is unfinished
Treat an incomplete candle as provisional.
While a period is still open, its high, low and current price can change. The displayed “close” is only the latest price until the period finishes. An unfinished candle can change direction, body size and wick length repeatedly.
A repeatable candle-reading order
Apply a disciplined chart-reading checklist.
Read a candle in the same order each time: identify the timeframe, compare close with open, measure the body, inspect the wicks and full range, note close location, then add surrounding context. Keep observation separate from prediction.