foundations · TRADING LEARNING GUIDE
One candle. An entire story.
What is this concept?
A candle summarizes an interval with open, high, low and close (OHLC). Its body joins open and close; the remaining range forms the wicks. Colour is a display choice, not a forecast.
Step by step
Record instrument, session and timeframe. Compare open with close, then measure the full range and both wicks. An unfinished candle can change until its interval ends.
From observation to decision
Record the instrument, venue, session and timeframe. Classify the observation using the definition, then write at least one alternative interpretation. Decide what evidence would invalidate your idea before entry. Mark missing information explicitly. Examples are hypothetical. Collect paper observations, including failures. Include fees, spread, slippage and timestamp alignment when measuring outcomes. Recognizing a chart shape and establishing a profitable trading rule are separate tasks.
Worked example
O=100, H=112, L=98, C=110 gives body 10, range 14 and two wicks of 2. Changing C to 99 reduces the body to 1 while the range stays 14.
Common mistakes and limits
Do not treat a green candle as an automatic buy or an unfinished close as final. A single candle cannot identify participants or prove the next return.
Practice
Calculate OHLC, body and wicks for three completed candles. Write two possible interpretations before revealing the next bar.
Resources and further reading
These sources explain definitions and underlying mechanics. Worked examples are original illustrations; a source does not establish the profitability of a custom pattern.
Further reading / foundational context. Worked examples on this page are original illustrations, not source performance claims.