Start with the axes
A chart organises price observations. Before looking for shapes, check the instrument, vertical-axis units, the period represented by each bar and the time zone. Zooming the scale changes the visual impression of a move even when the observed prices remain identical.
A candle summarises its period’s opening, high, low and closing prices. This summary does not reveal the complete intraperiod sequence. If a high and a low occur in the same candle, you cannot assume which came first without additional data.
Describe before interpreting
Synthetic example: a candle opens at 100, reaches 103, falls to 98 and closes at 101. Its range is five points and its body is one. We can calculate those quantities. The candle alone does not establish why quotes changed or what price will follow.
When volume is available, check what it measures and where it comes from. A series without volume cannot establish that participation increased. An open candle can also change: distinguish its provisional values from those of a completed candle.
Reading practice
Write three verifiable observations about a chart and two possible interpretations. Label the latter as hypotheses. Repeat the exercise with another scale and check which observations survive the visual change.
- Identify a candle’s opening, close, high, low and duration.
- Explain what you do not know about the price sequence within it.
- Move on when you can describe a chart without turning a shape into certainty.
Check your understanding
ACTIVITY · AT YOUR OWN PACE
Apply the idea before continuing
Write your answer before opening the reasoning. All prices, quantities and outcomes in this activity are hypothetical. Keep your explanation in your own notebook; it is not sent to the server.
The case
A closed candle has open 100, high 103, low 98 and close 101. No trade-level or intrabar data are available.
Your task
Calculate the range and body. Decide whether you can know which extreme happened first, and explain why.
Compare my answer with the reasoning
The range is 103 − 98 = 5 points and the absolute body is |101 − 100| = 1. The OHLC summary does not retain the order of the extremes. Any conclusion about their sequence needs additional information.
Evidence you should be able to explain
Two calculations with units and one information limit, without predicting the next candle.
If you cannot justify it, revisit the example and state what is missing. A memorised answer or simulated profit does not replace this explanation.
Practise with visible information →Sources and references
Chezur examples and explanations are educational. Consult the original source to verify conditions, data and updates.
Context and review of this explanation
How do I read time, price and candles on a chart?
- Topics
- Chart reading
- Level
- Beginner
- Skills
- Describe a chart
- Examples
- Hypothetical situations illustrating the concept.
- Specialist review
- Not documented for this edition. Automated structure and internal-link checks do not establish specialist review.