Candlestick charts: read a candle before reading a pattern
A standard candlestick summarizes four traded prices during one interval: open, high, low and close (OHLC). It shows what happened on a particular market, not what must happen next. Start with the numbers and chart settings before interpreting shapes or colours.
Your task: inspect a completed candle, calculate its body and range, and identify what its four prices cannot tell you.
Build one candle from four prices
Body: open 100 → close 106
In this imaginary one-hour market, the first trade is 100 and the last is 106. The body joins those values and has height 6. The close is 6% above the open. Prices are in the quote asset, not automatically dollars.
Upper wick: high 110
The highest trade is 110. The upper wick runs from the top of the body at 106 to 110: length 4. It records a traded extreme, not an offer you can necessarily execute now.
Lower wick: low 96
The lowest trade is 96. The lower wick runs from 96 to the bottom of the body at 100: length 4. The candle does not say whether 96 or 110 occurred first.
Walkthrough: inspect a chart without placing a trade
Confirm the market and interval
Record the exchange, trading pair, spot or derivative market, interval and time zone. BTC/USDT and BTC/EUR use different quote assets. Last-trade, index and mark-price charts can differ. Check how the platform defines daily boundaries before comparing candles.
Read the completed candle
Select standard candles and inspect OHLC in the data readout. Check the time stamp and whether the interval has ended: the newest candle can still change. Read volume separately, including its unit. One venue’s volume is not the volume of the entire crypto market.
Zoom out and keep the evidence
Compare with neighbouring candles and a longer interval on the same market. Note spread, thin trading and isolated price spikes. Save the time and values, then write a factual description before suggesting any explanation. A pattern name does not establish its cause or predict the next trade.
Worked example: range, body and missing sequence
For open 100, high 110, low 96 and close 106, the full range is 14 and the body is 6. Both paths 100 → 110 → 96 → 106 and 100 → 96 → 110 → 106 fit the same candle. OHLC alone cannot tell you which of two intraperiod price levels was hit first. Lower-interval data or individual trades are needed to investigate that sequence.
Three mistakes that change the reading
Treating colour as a universal rule
Platforms can colour by close versus open, by the previous close or with custom settings. A candle closing above its open can still be below the previous candle’s close. Check the legend and numbers; do not rely on red or green alone.
Using a smoothed candle as an execution price
Heikin Ashi uses calculated averages rather than ordinary OHLC prices. It can help display trends, but its body is not an actual trade record. Return to standard candles and current order data when checking prices. Synthetic charts are not fill guarantees.
Seeing a wick as proof of a reversal
A wick may reflect brief volatility, illiquidity or an unusual trade. A completed candle still cannot guarantee direction. An unfinished candle may lose its apparent pattern before closing. Separate observation from a trading claim.
Try it: reconstruct a downward candle
A completed candle has open 50, high 54, low 45 and close 47. What are its body, full range, upper wick and lower wick? Can you tell whether the high came before the low?
Reveal the answer
Body: 3, between 47 and 50. Range: 9. Upper wick: 54 − 50 = 4. Lower wick: 47 − 45 = 2. The close is 6% below the open. The order of the high and low is unknown from these four values. A long wick is not a promise of a bounce.
