A candle is four numbers and a period: open, high, low, close. Everything technical analysis claims to do is an inference from sequences of those four numbers. Starting there keeps you honest about how much any pattern can possibly tell you.
What the body and wick actually say
The body is the distance between open and close: where the period started and finished. The wicks are where price went and was rejected. On a liquid large cap that rejection means something like an orderly disagreement. On a 1.4M float it can mean one 8,000-share order swept four levels and came back, which is why single candles matter less than most courses tell you.
The timeframes
| Chart | What it is for | What it is bad at |
|---|---|---|
| 1-minute | Execution. Entries, stops, the exact break of a level. | Context. Everything looks like a reversal on a 1-minute chart. |
| 5-minute | Structure during the session. Flags, trend, the shape of a pullback. | Precision. A 5-minute candle can hide a 12% round trip. |
| Daily | Levels, gaps, prior consolidation, where the stock came from. | Anything intraday. Do not manage a day trade on it. |
Most experienced momentum traders run two charts: 1-minute for execution and 5-minute for structure, with daily levels drawn onto both. Adding a 15-minute and a 30-minute rarely adds information and reliably adds hesitation.
The gap is the most important thing on the daily
For a gapper, the daily chart's job is to tell you three things before 09:30: where the stock traded before the gap, whether there is any prior consolidation overhead to sell into, and how far the nearest reference level is. A name gapping into three years of empty space behaves differently from one gapping into the shelf where it was distributed last spring.
- ·Gap into clear air: no overhead supply, moves extend further, fewer natural sellers.
- ·Gap into prior consolidation: trapped holders from that range become supply on the way up.
- ·Gap into a prior gap-down: often the strongest, because the previous move down was fast and left no volume shelf.
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