Candles: what one candle tells you
What you learn in 3 minutesOne candle on a chart holds four numbers for one slice of time: the open, the high, the low and the close. Everything you can read from its shape comes from those four figures. When you know what each part means, you can look at a chart and see price behaviour rather than a coloured block.
One candle on EUR/USD: four numbers and a 0.10 lot
| Step | Amount | Note |
|---|---|---|
| Open | 1.0850 | The price at the start of the candle's time slice. |
| High | 1.0862 | The highest price reached during that slice. |
| Low | 1.0846 | The lowest price reached during that slice. |
| Close | 1.0858 | The price at the end of the slice. |
| Body height | 8 pips | Close minus open: 1.0858 − 1.0850 = 0.0008, which is 8 pips. |
| Upper wick | 4 pips | High minus close: 1.0862 − 1.0858 = 0.0004, which is 4 pips. |
| Lower wick | 4 pips | Open minus low: 1.0850 − 1.0846 = 0.0004, which is 4 pips. |
| Value of the body on 0.10 lots | ₱8.68 | 8 pips × 0.10 × 10 units per pip = 8 units of the quote currency, converted at the current EUR/USD rate of about 1.0850, giving roughly ₱8.68. |
Brokers vary in how they round pip values, and some charge a spread or commission on top. The exact peso amount you see depends on the rate at the moment of conversion and on your broker's terms.
The mistake people make here
The common mistake is to treat the wicks as noise and look only at the body colour. A long upper wick means price went up and came back down before the candle closed, which is information about sellers. A long lower wick means the opposite. Instead of guessing from colour alone, write down the four numbers for a few candles and calculate the body and wick sizes yourself. That habit turns the chart from a picture into a set of figures you can check.Check yourself
A candle opens at 1.0850, reaches a high of 1.0860, a low of 1.0844 and closes at 1.0856. What is the body height in pips, and what is that worth on 0.10 lots in pesos at a rate of 1.0850?
Body height: close minus open = 1.0856 − 1.0850 = 0.0006, which is 6 pips. On 0.10 lots, 6 pips × 0.10 × 10 = 6 units of the quote currency. At 1.0850, that is 6 ÷ 1.0850 ≈ ₱5.53.
Using the same candle, what are the upper and lower wick sizes in pips?
Upper wick: high minus close = 1.0860 − 1.0856 = 0.0004, so 4 pips. Lower wick: open minus low = 1.0850 − 1.0844 = 0.0006, so 6 pips.