Definition
Each candle summarizes one selected interval using open, high, low, and close. The horizontal axis usually represents time and the vertical axis price. A chart can therefore show both the movement between intervals and the range traded within each one.
How It Works
Selecting a five-minute timeframe groups trades into five-minute candles; a daily timeframe compresses much more activity into each candle. The same market can appear to rise locally while remaining in a longer decline. A chart of last-trade prices is also different from a mark-price or index-price chart.
Key Considerations
Confirm the pair, venue, timeframe, price source, and timezone before comparison. An unfinished candle can change shape, and sparse trading can produce misleading-looking gaps or isolated wicks. Patterns describe historical arrangements, not guaranteed forecasts. Use the chart with liquidity and volume context rather than treating every visual pattern as a signal.