The Anatomy of a Candle

Four numbers, one picture.

Every candle compresses a period of trading into four numbers: the open, the high, the low, and the close. The body spans open to close. The wicks reach out to the extremes. Long body One side dominated for the whole period. Conviction. Short body Buyers and sellers finished near where they started. Indecision. Long upper wick Price pushed up and was rejected. Sellers appeared at the highs. Long lower wick Price fell and was bought back. Buyers appeared at the lows. A candle's timeframe is whatever you choose. The same day is one candle on a daily chart and seventy-five on a five-minute one. The picture changes completely with the timeframe, which is the first thing beginners forget.

Part of Learn NEPSE Investing, a free course on reading Nepali company accounts and charts. Section: Charts.