A candle summarises one interval. It does not reveal every trade or the sequence of its high and low.
Four prices, one interval
The body spans the open and close. The upper wick reaches the high; the lower wick reaches the low. A five-minute candle and a daily candle use the same idea over very different periods.
Here, green means the close is above the open and red means it is below. Other platforms use different colours or hollow-candle conventions, so check the legend rather than assuming.
Read range and close together
A wide body records a large open-to-close move. A long wick records prices visited beyond the body. A close near the high describes the end of that interval; it does not prove who traded, why they traded or what the next candle will do.
The same four prices can result from different intraday paths. Use lower-timeframe data if the sequence matters, and remember it still does not expose every participant's intent.
Check the chart settings
Confirm the instrument, interval, exchange timezone and whether extended hours are included. Check whether historical prices are adjusted for splits or dividends. A gap, adjustment or thin session can change the appearance of a pattern.
Compare a candle with nearby ranges and volume, then with a longer timeframe. Avoid giving a small, ordinary candle a dramatic explanation just because its silhouette has a name.
Describe first, interpret second
Take three historical candles. Write only open, high, low, close, range and timeframe. Then add a separate interpretation and one alternative explanation. Keep the next candle hidden while doing the exercise.
Terms in this guide
Try an example: Find the close → Separate body from range →
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Educational notes, not personalised financial advice. Hypothetical examples and chart shapes are not performance claims or trading signals.