Candlestick charts: what one candle can and cannot tell you

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A candlestick chart draws price over time as a row of candles. Each candle summarizes one interval, such as one minute, five minutes or one day, with four prices:

• Open: the first eligible trade price in the interval.
• High: the highest eligible trade price.
• Low: the lowest eligible trade price.
• Close: the last eligible trade price.

The thick part, the body, runs from the open to the close. The thin lines above and below, the wicks (also called shadows), reach up to the high and down to the low. The color shows whether the close was above or below the open. A line chart connects only the closes; an OHLC bar chart shows the same four prices as small ticks instead of a body.

The core idea: a candle is a summary of the trades in one interval, built under choices. The interval, the session, which prints count and how the candle is labelled are all settings. A candle tells you where price started, how far it ranged and where it ended in that interval. It does not tell you the order of the moves inside the interval, who traded, or what the next candle does. On small caps, which can move several percent inside one minute, that limit matters.

Most traders look at a chart before anything else, so the chart shapes the first story they tell about a stock. This lesson treats a chart the way Time & Sales treats the tape: as a record of what traded, read with its settings in view.

One 5-minute candle from five 1-minute candles

All prices and volumes in this example are Illustrative. Pellwood Robotics is fictional.

Here are Pellwood Robotics' five 1-minute candles from 09:35 to 09:39 ET, regular session only.

To build the 5-minute candle labelled 09:35:

Now read its shape:

• Body: close − open = $3.14 − $3.10 = $0.04. The close is above the open, so most platforms draw it green or hollow.
• Range: high − low = $3.24 − $3.01 = $0.23.
• Upper wick: high − the higher of open and close = $3.24 − $3.14 = $0.10.
• Lower wick: the lower of open and close − low = $3.10 − $3.01 = $0.09.

So the 5-minute candle is a small green body with long wicks on both sides. That summary is accurate. What it hides is the path. The 1-minute candles show the stock first fell from $3.18 to $3.01 (09:35 to 09:37), then rose to $3.24 (09:38), then gave back ten cents. A trader who saw only the 5-minute candle could not tell whether the low came before the high or after it. Exactly the same candle could come from a minute-by-minute path that made the high first. Here is one such path (Illustrative):

It also opens at $3.10, reaches $3.24, touches $3.01 and closes at $3.14. One trader would describe the first path as "flushed, then ripped"; another would describe the second as "spiked, then faded and bounced". The 5-minute candle is identical.

The conclusion: a candle answers "where did it open, how far did it range, where did it close?" It does not answer "what happened first?" When the order matters to you, switch to a smaller timeframe and note the time of the high and the time of the low. On most platforms that takes a few seconds of hovering, and it replaces a guess with an observation. The 561,000 shares are the same in both paths too: volume shows how much traded in the interval, not when within it. The rest of this lesson covers the settings that change candles: timeframe, session, which prints count, and how platforms label and adjust them.

Anatomy: body, wicks and color

The wick formulas from the example work for every candle. For a red candle (close below open), the close is the bottom of the body, so the lower wick runs from the close down to the low. Using the open by mistake makes the lower wick look larger than it is, and the upper wick smaller.

Color is a display setting. Most platforms color a candle green, or draw it hollow, when the close is above the open, and red or filled when it is below. Some platforms instead color by comparing the close with the previous candle's close. A candle can then be red with its close above its own open. Check your platform's setting before reading color.

A candle whose open and close are nearly equal is often called a doji. The name describes a shape, nothing more.

Most charts draw a volume bar under each candle. It counts shares traded in that interval, under the same session and print rules as the candle (Volume and relative volume).

Timeframes: the same trades, different candles

The same trades can be drawn as 1-minute, 5-minute, 15-minute or daily candles. A larger interval means fewer candles and more hidden inside each one. Larger candles can be built from smaller ones with the rule in the example, as long as both use the same settings.

Two labelling details change what you think you are looking at:

• Alignment. Intraday candles are usually aligned to the clock: a 5-minute candle covers 09:35:00 to 09:39:59, not "the last five minutes".
• Label time. Most platforms label a candle by the minute it starts. Some label it by the minute it ends. The same "09:40" can then mean two different intervals. Hover over a candle to see which interval it covers.

Daily candles often use the regular session only. In that case the daily high and low follow the consolidated-tape rules, under which premarket and after-hours (Form T) trades do not count toward the high or low (Time & Sales; rules checked 2026-10-06).

Extended hours: in or out

Most charting platforms let you show or hide premarket and after-hours candles. The setting can change the story of the day.

Illustrative: Ashgrove Bio, a fictional gapper, trades as high as $5.10 at 07:42 ET in premarket. In the regular session its high is $4.60.

• A 1-minute chart with extended hours shown has a candle reaching $5.10.
• The same chart with extended hours hidden starts at 09:30, and its highest candle reaches $4.60.
• A daily candle built from the regular session shows a high of $4.60.

Each chart is correct for its own definition. High of day, low of day and VWAP shows how the same choice changes "high of day".

Premarket candles also behave differently. Fewer trades print, so a 1-minute premarket candle may contain only one or two trades, and some minutes contain none. Platforms handle empty minutes differently: some leave a gap, others draw a flat candle at the last price. A long wick on thin premarket volume can come from a single small trade.

Reading a row of candles

Candles are usually read in sequence. A few comparisons are observations you can make without any pattern names:

• Highs and lows. Is each candle's high above the previous one's, or below?
• Range. Are the candles getting longer or shorter from high to low?
• Gaps between candles. A candle can open away from the previous candle's close. The largest gap of the day is often between the last premarket candle, or the previous day's close, and the 09:30 candle, when the opening auction sets the open.
• Volume under each candle. Did larger candles come with more shares traded?

Write these as observations ("three higher highs, ranges shrinking, volume falling") rather than conclusions. Whether a sequence like that tends to lead anywhere is a counting question for your own log, not something a chart answers by itself.

Why two platforms draw different candles

When two screens show different candles for the same minute, check these causes before calling one of them wrong:

1. Session setting: extended hours shown on one, hidden on the other.
2. Which prints count: under the consolidated rules, odd lots, average-price trades and extended-hours trades do not set the high or low. A platform that builds candles from every print can draw a wick the other does not.
3. Data coverage: a feed from one exchange misses trades on other exchanges and off-exchange; consolidated data includes them.
4. Label time and time zone: start or end of the interval; ET or your local time.
5. Split adjustment: after a reverse split, which small caps sometimes do, adjusted history rescales old prices and volumes. An unadjusted chart shows a jump in price that no trade produced.
6. Corrections: a cancelled trade can be removed later, so a chart loaded the next day can differ from the live one.

What one candle can and cannot tell you

A candle can tell you the open, high, low, close and volume of one interval under your platform's settings.

A candle cannot tell you:

• the order of the moves inside the interval;
• who traded, or why;
• whether a long lower wick means "buyers stepped in" (that is an inference about motive);
• what the next candle does.

Pattern names such as doji, hammer or engulfing candle describe shapes. This lesson makes no claim that any shape predicts what follows. The scalping course treats one well-known pattern as a hypothesis to define and count: Bull flag pattern.

Observe vs. infer

Pellwood Robotics, 5-minute candle labelled 09:35 (fictional; all figures Illustrative):

Common mistakes

• Reading order from one candle. Drop to a smaller timeframe to see the sequence.
• Comparing platforms without matching settings. Match session, timeframe, label time and adjustment first.
• Treating a thin premarket wick like a regular-session wick. One small trade can make it.
• Leaving out the timeframe. "It closed above $3" means something different on a 1-minute and a daily chart.

Apply it in FennEdge

• In-Play Days shows 1-minute candlestick and volume charts of past active days, with premarket, regular and after-hours candles classified in ET. Point to a candle to read its open, high, low, close and volume. Any visitor can open a ticker's most recent active day in full; earlier days need Max (as of 2026-10-06). It draws no VWAP line.
• The Gapper HOD Timeline shows when past gappers made their high, using 1-minute highs from 04:00 to 20:00 ET. The Top Gappers Calendar lists past gap days. Both are historical review tools.

What this lesson does not claim

• It does not claim that any candle shape or pattern predicts price.
• Platform behavior described here (colors, labels, empty minutes) varies; check your own platform's settings.
• Pellwood Robotics, Ashgrove Bio and all prices in this lesson are fictional.

Go deeper

• FennEdge first. In-Play Days for 1-minute charts of real past sessions.
• In this course: Time & Sales for the prints behind each candle; next, High of day, low of day and VWAP.
• Patterns as hypotheses: Bull flag pattern in the scalping course.

Exercises

Three exercises follow this lesson: a concept check (what a single candle shows), a calculation (the lower wick of a 5-minute candle built from five 1-minute candles) and a scenario (a wick that appears on one platform only). Exercises, answers and progress are available after signing in.

Primary sources

• UTP Plan. UTP Data Feed Services Specification, Version 4.1 (September 2026): §3.14 sale condition matrix and notes.
• CTA Plan. CTS Pillar Output Specification, Version 2.11b (2026-01-29): Sale Condition field.
• FINRA. Extended-Hours Trading: Know the Risks.

Sources checked 2026-10-06. Pellwood Robotics, Ashgrove Bio and all bars, prices and volumes in this lesson are fictional and Illustrative. This lesson is education, not a recommendation to buy or sell any security. Past patterns do not indicate future results.