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Education · Technical Analysis · Chapter 1 of 4

Charts & trend basics

5 min01 / 04

A price chart is a trader's terrain map. Each bar tells the story of the battle between buyers and sellers over one time period: it could be 1 minute, 1 hour, or 1 day.

Candlestick anatomy

Candlesticks are the most popular chart form because they're information-dense. One candle carries four prices: open, close, high, and low, all within a single period.

HighCloseOpenLowBullishBearish
Green candle = price rose (close > open). Red candle = price fell (close < open).

The body colour shows direction: green means the close is above the open; red means the close is below. Body and wick length tell you strength: a long body means clear dominance, long wicks mean price was rejected.

Three trend conditions

At the highest level the market only does three things: go up (uptrend), go down (downtrend), or move sideways (range). Recognizing which one you're in is the most fundamental step before applying any indicator.

UptrendDowntrendSideways
Uptrend: higher highs & higher lows. Downtrend: lower highs & lower lows. Sideways: bounded range.

Rule of thumb: trading with the trend has a higher probability than trading against it. 'The trend is your friend' is not just a quote.

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