Candlesticks, volume and timeframes: reading OHLC

Four prices, one interval

Open is the first recorded trade price in the interval, high the maximum, low the minimum and close the last. The body spans open and close; wicks extend to high and low. A rising candle does not mean every trade was a buy: every executed trade has both a buyer and a seller.

An unfinished candle is still changing

Before an interval ends, the latest close is provisional and the high and low can extend. An indicator using the open candle can therefore change without any historical error. Distinguish a closed candle from a live bar when writing a comparison. A screenshot halfway through an interval is not the final observation for that interval.

Read a numerical candle

Hypothetical 5-minute OHLC: open 100, high 106, low 98, close 103. The body is three price units and the full range is eight. The upper wick is three and the lower wick is two. Close-to-open return is 3%; it is different from a return measured from the previous candle close or from a rolling 24-hour reference.

Timeframes aggregate observations

A one-hour candle can be built from twelve complete five-minute candles when boundaries and sources agree: take the first open, maximum high, minimum low and last close. Sum compatible volume fields. Do not average the twelve closing prices and call that the hourly close. Missing constituent bars mean the aggregate may be incomplete.

Timezones change boundaries

The same trades can fall into different daily candles when the daily boundary changes. Compare timestamps, timezone and whether a session or rolling window is used. A 24-hour change is not necessarily the current calendar-day return. Displaying UTC labels does not repair a dataset aggregated using a different boundary.

Volume needs a unit and coverage

Base volume counts asset units, while quote volume values executions in the quote asset. Contract counts need their multiplier and contract specification. Spot and perpetual volume describe different markets. A buy/sell notional split depends on aggressor classification and is not a count of bullish versus bearish people. Missing data is not zero volume.

Structure before a pattern label

Wicks can reflect volatility, thin liquidity or brief executions, but a candle alone does not identify the cause. Compare depth, executed flow and venue coverage rather than assigning certainty to a shape. RSI and MACD transform past observations and depend on timeframe and settings. Neither an indicator crossover nor a named candle guarantees the next move.

Practice using the terminal

Use a closed interval, identify all four prices and name the volume unit before comparing another timeframe. The local exercise uses a fictional candle, so its answer does not depend on a live market request. Record the source and time boundary when sharing a chart. Continue to the existing technical-analysis guide for indicator mechanics and limits.