Anatomy of a candle

6 min 30 XP

A candle is a battle report

Every candle compresses one period of auction (1 minute, 1 hour, 1 day…) into four prices: where it opened, the highest point buyers reached, the lowest point sellers reached, and where it closed. The close is the verdict, where the battle actually settled when time ran out.

The four prices of every candle

The body = distance between open and close → how decisively one side won.
The wicks (shadows) = extremes that were reached *and rejected* → failed attacks.
A large body = conviction. Long wicks = a fight, and someone got pushed back.
One candle alone is a sentence. Context, the candles around it, is the paragraph. Never read a sentence in isolation.

Same period length, three completely different stories

Train your eye to ask

*Who won this candle, and did the loser leave a trace?* A long upper wick after a rally whispers that sellers are waking up. That whisper, repeated at the same price, becomes Module 5: resistance.

Praxis.

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Level 1: Foundations

Module 4: Reading Candles · Lesson 21/40