Candle
A single bar on a candlestick chart showing the open, high, low and close for one period.
Full explanation
A candle summarises everything price did in one time period. The body spans the opening and closing prices; the thin lines above and below — the wicks — show the highest and lowest prices reached during that period.
The period depends on the chart: a 5-minute candle covers five minutes, a daily candle covers a full trading day. The same market looks calm on one timeframe and dramatic on another, which is why the timeframe is always part of the observation.
Candles are useful because they show conflict as well as outcome. A long wick with a small body says price was pushed somewhere and rejected; a large body with small wicks says one side controlled the whole period.
Why traders watch it
Candles turn "the market went up" into something specific and checkable. Most of the observable rules in a trading plan — a close beyond a level, a rejection wick, an oversized momentum candle — are read directly from candles.
The Trading Plan deliberately phrases guidance in candle terms ("wait for a close beyond the level, not just a wick") so each instruction can be verified on your own chart rather than judged by feel.
Trading considerations
- Always know which timeframe a candle belongs to before drawing conclusions.
- Body size shows conviction; wick length shows rejection.
- A candle only counts as complete once its period has finished.
Educational guidance only — never a trading signal or recommendation.
Related indicators
ATR (Average True Range)
ATR, or Average True Range, measures the average distance a market travels over a chosen number of periods, including gaps. It is a pure volatility reading with no directional bias. Traders use ATR to set stop distances that respect normal noise, to size positions consistently, and to judge whether current conditions are unusually quiet or unusually fast.
Bearish candle
A candle that closes below its open — sellers finished the period in control.
Bollinger Bands
Bollinger Bands are a volatility indicator made up of a moving average with upper and lower bands that expand and contract as market volatility changes. They help traders judge whether price is becoming stretched, identify volatility changes, and support both trend-following and mean reversion analysis.
Breakout
A breakout occurs when price moves decisively beyond a defined level such as a range high, trendline or consolidation boundary. It signals that the balance between buyers and sellers has shifted and can start a sustained move. Breakouts also fail often, so traders look for confirmation through follow-through, expanding range and a successful retest of the broken level.
Bullish candle
A candle that closes above its open — buyers finished the period in control.
Candle close
The price at which a candle finishes its period — the standard evidence that a move is genuine, not a spike.