What is a candlestick?
Hook
NQ · 5-min practice chart
Learn more · the details, worked example and common mistakes
A candle doesn't show the path price took inside its period, only four prices: where it started, the highest, the lowest, and where it ended.
Two very different five-minute paths can make the same candle, as long as those four prices match.
Green or red only tells you how the period finished. It says nothing about the next candle.
Common mistakes
- A candle doesn't tell you whether price reached its high or low first. It only shows the open, high, low, and close.
- Reading a green candle as a promise that price keeps rising.
From the trading desk
Day traders of Nasdaq futures often watch 1-, 5- and 15-minute candles side by side. The four prices work the same on every one; only the time changes.