All lessons
Candles and timeframes
A candle is a tiny summary, not a complete recording. Change the timeframe and the same price journey gets a different summary.
Read open, high, low and close without inventing the path inside a candle.
A candle summarises prices during a chosen interval. Open is the first recorded price, close the last, high the maximum and low the minimum. The body joins open and close; wicks extend to the extremes. Colours follow the chart's settings.
A one-hour candle combines smaller observations, but its four values do not reveal every movement in between. Two very different intraperiod paths can create the same candle. Therefore a backtest cannot always know which of a target and stop was reached first from that candle alone.
Timeframe and timezone affect aggregation. Daily candles can differ between brokers because the day begins at different times. Also check whether prices are bid, ask or another series. The currently forming candle is incomplete, so a shape observed midway may disappear before the close.
Let’s use numbers · hypothetical example
One interval opens 1.1000, reaches 1.1030 and 1.0980, and closes 1.1010. The body spans 10 pips; the full high-low range spans 50 pips.
Keep in mind
A long wick describes a price excursion; it does not by itself prove who traded or predict the next candle.
Your turn
Draw the example candle, label its four prices and list two possible paths between open and close.
A quick check before we move on
What cannot OHLC alone reliably reveal?
- The interval's highest recorded price
- The interval's closing price
- The exact sequence of every price move
Check answer
The exact sequence of every price move OHLC records four summary values. It does not preserve the complete sequence inside the interval.
Sources and further reading
Content reviewed: 29 October 2026
Educational material with hypothetical examples. Trading can cause substantial losses. A course, pattern, stop order or past result cannot guarantee a profit or limit every loss. Practise in simulation and check current rules and product terms in your jurisdiction.
