Prices and timeframes
Learn more · the details, worked example and common mistakes
From here on, any chart that asks for an exact price has a price scale on its right edge. Go straight across from any point to read its price, or point at the chart and read the label on the scale.
A five-minute candle sums up five minutes. Twelve finished five-minute candles sum up one hour: the hour opens where the first one opens, closes where the last one closes, and its high and low are the highest high and lowest low of the twelve.
An hourly candle exists only once all twelve of its five-minute candles have finished.
CandleLab practises on five-minute charts. This lesson shows how they add up; nothing here asks you to use several timeframes at once.
Common mistakes
- Reading a price from the top of the body when the question asks for the high. The high is the wick tip.
- Building the hourly candle before its last five-minute candle closes.
- Taking the hour's close from the highest candle. The close is the last candle's close.
Day traders often look at a bigger timeframe first and a smaller one for detail. The same move can be one candle on the hourly chart and a dozen on the 5-minute chart.