TradingBeginner#Technical Analysis#Basics
Candlestick Chart
C
Definition
A chart that summarizes the open, high, low, and close recorded for a chosen market, data feed, and time interval. It describes past price observations; it does not reveal the identities, motives, or future actions of market participants.
Source reviewed
- FINRA: What Is Market Timing? opens in a new tab
Supports: Explains that technical analysis based on price or volume can be used in attempts to anticipate short-term moves, while frequent prediction-based trading has costs, missed-opportunity, and risk considerations.
- SEC Investor Bulletin: Performance Claims opens in a new tab
Supports: Explains that past performance does not necessarily predict future results and that calculation assumptions affect how performance information should be understood.
Concept Diagram
Key Takeaways
1
A candle records open, high, low, and close for a specified market, feed, and time interval
2
The body and shadows describe recorded price range and close location, not participant identity or order flow
3
Named patterns are descriptive hypotheses, not evidence of a reversal, continuation, or future return
4
Test any rule with defined venue, interval, costs, liquidity, risk limits, and out-of-sample evidence
Practical Example
A BTC/USD candle for a named exchange and one-hour interval opens at $60,000, reaches $60,300, trades as low as $59,800, and closes at $60,150. It records those four values. A reviewer checks whether another venue used the same interval and price feed, then treats the candle as context rather than claiming it proves buying pressure or the next move.
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Related Terms
Trading
FVG (Fair Value Gap)An analyst-defined three-candle price range with no overlap between the first and third candle's wicks after a fast move. It is a chart annotation, not proof of institutional activity, unfilled orders, future liquidity, or a likely price return.
Market Structure
Order Block (OB)An informal chart zone, often drawn from a candle or range preceding a later move. It does not identify an order, its owner, its size, or an institutional entry point.
Trading
VWAP (Volume Weighted Average Price)A price-volume average calculated over a specified venue, asset, data source, and time window. It is a descriptive benchmark, not a universal fair value or trading signal.
Trading
Point of Control (POC)The price bin with the highest reported traded volume in a selected volume-profile calculation. It depends on the venue, data, binning method, and time window chosen.
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