# Candles and timeframes

> Read one candle in a few seconds, and see how a calm week can hide one frightening day.

- Course: [Trading Basics: How It Works, How Not to Lose Everything](https://productovi.com/courses/trading.md)
- Module: What is a price chart telling me?
- Lesson 17/32, ~27 min
- Source: https://productovi.com/courses/trading/candles-and-timeframes

## Red and green sticks

**Alex Tutor:** Back on your Pebble practice account, today prices turn into pictures. Nora is staring at one on her phone, and she's worried.

![Nora frowns at one big falling candle on her phone, while Alex points to a board where five daily candles fold into one rising weekly candle and Marc waits calmly.](https://productovi.com/courses/trading/diagrams/m5-l1-scene.png)

**Nora:** Bluefin Energy, daily chart. It's just red and green sticks. Yesterday's stick was long and red, so it's going down, right? Should I panic?

**Sofia:** So far I've only seen a simple line chart.

**Alex Tutor:** A line chart joins one price per day, usually the close. It's clean, but it hides the trip the price made during the day. Candles keep a bit of that trip.

**Alex Tutor:** Quick check before we open a candle: what does that clean line actually leave out?

> **Exercise:** A line chart of Bluefin Energy joins one price per day, the close. What does it leave out?

**Alex Tutor:** First, let's read what a stick actually says. Each one is a **candlestick**, or candle: one period of trading squeezed into one shape. On a daily chart, one candle is one day.

**Alex Tutor:** Each candle stores four numbers: where the day started (the **open**), where it finished (the **close**), its top (the **high**) and its bottom (the **low**). The fat block from start to finish is the **body**. The thin sticks poking out are the **wicks**: how far the price wandered.

**Alex Tutor:** On Pebble, a candle is green when the close is above the open, and red when it's below. Colour tells you the direction inside that one period, nothing more.

![A candle stores open, high, low and close. On 2026-01-21 the close (45.10) is above the open (44.20); on 2026-02-11 the close (44.11) is below the open (45.95).](https://productovi.com/courses/trading/diagrams/m5-l1-candle-anatomy.png)

*Body from open to close, wicks to the top and bottom of the day.*

> **Exercise:** Match each part of a candle with what it shows.

**Alex Tutor:** Colour trips people up more than anything else. Try this one.

> **Exercise:** A red candle on Pebble means the price closed lower than the previous day's close.

## One candle in numbers

**Alex Tutor:** Here are 40 days of Bluefin Energy on Pebble. Find 2026-01-21: it started at 44.20, climbed as far as 45.60, sank to 43.90 at worst and finished at 45.10.

**Dataset (CSV):** [Bluefin Energy, 40 daily candles](https://productovi.com/datasets/trading/candles-and-timeframes/m5_bfe_candles.csv)

Practice market data on Pebble. Prices in dollars, volume in shares.

- `date`: Trading day
- `open`: First price of the day
- `high`: Highest price of the day
- `low`: Lowest price of the day
- `close`: Last price of the day
- `volume`: Shares traded that day

**Sofia:** The close is above the open, so it's green.

**Alex Tutor:** Right. Two quick numbers tell you how big the day was. The **range** is high minus low: the whole distance travelled. The **body** is the distance from open to close.

> **Exercise:** On 2026-01-21 Bluefin Energy opened at 44.20, reached a high of 45.60, fell to a low of 43.90 and closed at 45.10. What was the range of that candle (high minus low), in dollars?

**Alex Tutor:** Compare the two. A long body with short wicks: the price moved one way and stayed there. Long wicks around a small body: it travelled far and came back. Both describe the day. Neither predicts the next one.

**Nora:** So the price went down to 43.90 first and then up to 45.60?

**Alex Tutor:** Maybe. Maybe it went up first. The candle doesn't say. It stores four numbers and forgets the route between them.

![Down first or up first: two different routes through 2026-01-21 give the same candle, so a candle can’t tell you which came first.](https://productovi.com/courses/trading/diagrams/m5-l1-route.png)

**Marc:** That's why I don't read stories into one candle. It's a summary of a day, like a receipt total. You see the sum, not every item.

> **Exercise:** A green candle with a long lower wick shows that the low came before the high that day.

## One week, two zoom levels

**Alex Tutor:** Now Nora's scary candle, 2026-02-11: it started at 45.95 and finished at 44.11. That's a drop of 4.0% in one day. On a daily chart it's the biggest red candle in sight.

**Alex Tutor:** The **timeframe** is how much time one candle covers: a minute, an hour, a day, a week. Same prices, different zoom. Here's that week, one day at a time.

**Bluefin Energy, week of 2026-02-09, daily closes**

| date | Close |
| --- | --- |
| 2026-02-06 | 45.14 |
| 2026-02-09 | 45.59 |
| 2026-02-10 | 45.95 |
| 2026-02-11 | 44.11 |
| 2026-02-12 | 44.77 |
| 2026-02-13 | 45.75 |

**Alex Tutor:** The weekly file squeezes each five days into one candle. That week opened at 45.14 (Monday's open) and closed at 45.75 (Friday's close).

![The five daily candles of the week of 2026-02-09, including the −4.0% day, fold into one weekly candle from Monday’s open 45.14 to Friday’s close 45.75.](https://productovi.com/courses/trading/diagrams/m5-l1-day-to-week.png)

*The scary day becomes the lower wick of the week.*

**Dataset (CSV):** [Bluefin Energy, the same 40 days as 8 weekly candles](https://productovi.com/datasets/trading/candles-and-timeframes/m5_bfe_weekly.csv)

> **Exercise:** In the week of 2026-02-09 Bluefin Energy opened on Monday at 45.14 and closed on Friday at 45.75; on Wednesday it fell 4.0% in a day. By how many percent did it change over the whole week, from the week's open to its close? Round to one decimal.

**Nora:** I almost sold everything on that Wednesday evening. By Friday the week was up.

**Alex Tutor:** That doesn't prove holding was right; next time the week could close red. It shows that one candle on a short timeframe is a thin reason for a big decision.

**Nora:** So which one is true, the red day or the green week?

**Alex Tutor:** Both. They answer different questions. Pick the timeframe that matches how long you plan to hold. If you hold for weeks, one hour or one day mostly shows noise.

**Marc:** And a candle is a record of the past, not a forecast. A big red one says sellers pushed hard that day. It doesn't say what tomorrow does.

> **Exercise:** Marc plans to hold positions for two to six weeks. Which chart suits his decisions best?

**Alex Tutor:** One more, about Nora's big red candle. What does it tell her for certain?

> **Exercise:** On 2026-02-11 Bluefin Energy printed its biggest red daily candle in weeks: open 45.95, close 44.11. What does this candle tell you for certain?

**Nora:** So I shouldn't look at the daily chart at all?

**Alex Tutor:** Look at it, just don't let one candle decide. Start with the timeframe that fits your plan, then zoom in for the details.

**Alex Tutor:** Last one. Explain this to Nora in your own words, using the numbers.

> **Exercise:** Nora says: "The big red candle on 2026-02-11 means Bluefin Energy is falling. I'm selling everything." In 2–3 sentences, explain what the one-day candle and the one-week candle show, and what a candle can't tell her.

> **Key ideas**
>
> - A **candlestick** packs one period into four numbers: start, top, bottom, finish. Body = start to finish; wicks = how far the price wandered.
> - **Range** = high − low; **body** = |close − open|. On 2026-01-21: range 1.70, body 0.90.
> - A candle forgets the route: it can't say whether the top or the bottom came first.
> - The **timeframe** is the time one candle covers. A −4.0% day sat inside a +1.4% week.
> - Match the timeframe to your holding time. A candle is a record, not a forecast.

> **Educational, not advice**
>
> This course explains how trading works; it never tells you what to buy or sell. Most people who trade lose money, and you can lose all of it. For taxes and rules, ask a licensed professional where you live.

- Previous lesson: [Case: compare two trade lists](https://productovi.com/courses/trading/compare-two-trade-lists.md)
- Next lesson: [Trend and range](https://productovi.com/courses/trading/trend-and-range.md)

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