Learn/ Charts/ Lesson 01

Charts · Lesson 01 7 min read Beginner

One candle holds four numbers

Before patterns, before indicators, before anything — a candle records four prices and nothing else. Most of the confusion further down the track comes from never having looked at this properly.

The four numbers

A candle covers a fixed stretch of time — five minutes, a day, a week. Whatever happened inside that stretch, the candle records only four prices from it: where trading opened, the highest price reached, the lowest, and where it closed.

The thick part, the body, runs from open to close. The thin lines above and below, the wicks, run out to the high and the low. Colour tells you one thing only: whether the close was above the open.

Anatomy of a candleDiagram
CLOSE ABOVE OPEN High — sabse upar tak gaya Close — yahin band hua Open Low Bullish candle Open Close Bearish candle body = open to close wick = rejected price
Everything a candle knows is in those four numbers. It does not record the order things happened in, and that limitation matters more than beginners expect.

What a wick actually means

A long wick is not decoration. It marks a price the market reached and then refused to hold. Somebody was willing to trade up there, or down there, and within that same stretch of time the price came back.

Two rejectionsIllustrative
Same information, opposite directions: the long lower wick says a drop was bought back within the period; the long upper wick says a rise was sold into.

The body tells you where the argument ended. The wick tells you how far it travelled before it got there.

Body size is relative

A wide body means the period was one-sided — it opened near one end and closed near the other. A narrow body means it finished close to where it began, whatever it did in between.

But “wide” only means anything compared with the candles around it. A body that looks large on a quiet chart would be unremarkable on a busy one. Always read size against its own neighbourhood, never against a number you memorised.

Wide and narrow, in contextIllustrative
Read the ratio, not the pixels: the widest body here is about six times the narrowest. That relationship is the signal — the absolute size is not.

Read it yourself

Three questions on one chart. Work them out before revealing the marks.

Practice
  1. Which candle has the widest body, and what does that say about the period it covers?
  2. Which candle has the longest lower wick?
  3. Find the candle that reached the highest price on the chart. Did it close anywhere near that price?
Show answers

1. The third candle. It opened near its low and closed near its high, so buyers held the upper hand from start to finish.

2. The sixth. It traded well below its open and finished back near the top of its own range — the drop was bought.

3. The tenth candle made the chart's highest print, and closed almost exactly where it opened. Reaching a price and holding it are different events, and a candle records both.

Terms used

OHLC
Open, high, low, close — the four prices a candle records.
Body
The thick part, running from the open to the close.
Wick
The thin line beyond the body, running out to the high or the low. Also called a shadow.
Rejection
Price reaching a level and failing to stay there within the same period.
Timeframe
The stretch of time one candle covers.

Practise this on your own charts

The Charts track works through 10 lessons like this one, each built around a drawn example and an exercise you complete yourself.

See the Charts track