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Candlestick course · Practice lab

Now tell the chart’s story.

Use what you learned. Start with facts, consider more than one ending, and check your thinking without putting money at risk.

← All 20 lessons

The six-candle challenge

Imagine that the marked 14.8–15.2 area is a resistance zone you drew before candle F. Study the completed candles before opening the possible endings.

A fictional chart with six completed candles, A to F. Shaded zone: 14.8–15.2 tokens. All prices are invented.

Read exact candle values

OHLC prices in imaginary tokens
Candle	Open	High	Low	Close
A	10	12	9	11
B	11	14	10	13
C	13	14.8	12	14
D	14	15	12.5	13
E	13	15.2	12	14.5
F	14.5	17	14	16

Write candle F’s open, high, low, close, body size and range.
State a fact about its close relative to the zone. Separate that fact from your interpretation.
Describe two possible next moves and what would challenge each interpretation.
Choose a paper action, including waiting. Explain uncertainty and costs.
Write what you would record if your first idea turned out wrong.

Reveal the model observations and three possible endings

F has O=14.5, H=17, L=14 and C=16. Its body is 1.5 tokens and its range is 3. Its close is above the marked zone. That observation does not prove a lasting breakout.

Ending A: O16, H19, L15.5, C18 continues higher. Ending B: O16, H16.5, L13, C14 returns below the zone. Ending C: O16, H16.4, L15.6, C16 makes little open-to-close progress. These are alternative invented scenarios, not assigned probabilities.

Give yourself up to 10 learning points: two each for accurate facts, alternative scenarios and challenge conditions, separating fact from forecast, a reasoned paper decision, and an honest review. A score is a study aid, not evidence of trading readiness.

Your 20-question final check

Answer in your own words before revealing each explanation. Give yourself one learning point for a correct explanation, then revisit any lesson you found difficult.

1. A candle has O=8, H=13, L=7, C=11. Is it UP or DOWN?

UP, because 11 is above 8.

2. For that candle, what is the body size?

3 tokens: 11 minus 8.

3. For that candle, what is the full range?

6 tokens: 13 minus 7.

4. For that candle, how long is the upper wick?

2 tokens: 13 minus the upper body edge at 11.

5. Does a doji always have a tiny high-low range?

No. Its open and close are close together, but its high and low may be far apart.

6. Three UP bodies shrink from 6 to 3 to 1. Is a reversal certain?

No. Open-to-close progress shrank, but the next direction is not certain.

7. What is the difference between a support zone and a guaranteed floor?

A support zone describes past reactions. It can break and does not guarantee a floor.

8. Does a candle tell you how many buyers were present?

No. Each completed trade has both sides; the candle summarizes prices.

9. An UP anchor opens at 30. A later close is 29. What is the fact?

The later close is below the anchor open. A new downtrend is not guaranteed.

10. What earlier part must a body-engulfing candle cover in our exercise?

The earlier real body, between its open and close; not necessarily its wicks.

11. Can a failed UP idea make waiting reasonable?

Yes. Failure does not require immediately choosing the opposite position.

12. Why is "people took profits" not automatically a chart fact?

OHLC alone does not reveal everyone's positions or motives.

13. A wick crosses resistance but the candle closes inside. Is that a completed close beyond it?

No. High and close are different, and the close remained inside.

14. Does a triangle prove which direction will break next?

No. It describes narrowing movement, not a guaranteed direction.

15. Four aligned 15-minute candles start at 6, end at 10, have a largest high of 12 and lowest low of 5. Give the hour OHLC.

O=6, H=12, L=5, C=10.

16. Can you tell the complete intraperiod path from one OHLC candle?

No. Different price paths can share the same OHLC.

17. A pretend loss budget is 12, entry is 30 and planned exit is 27. What is the simple quantity before costs?

4 units: 12 divided by 3.

18. If those 4 units actually exit at 26, what is the price loss?

16 tokens: 4 times the distance from 30 to 26, before costs.

19. What is the total of +2, -1, -1 and -1 before costs?

-1 token. A larger winning outcome did not guarantee a positive total.

20. Should a fair journal include a losing example and a decision to wait?

Yes. Both belong in a complete record.

A fair paper journal

Keep your own notes beside the course. Record the same information for every example, including losses and decisions to wait. Do not rewrite your original idea after seeing the outcome.

Date, chosen market, timeframe and the last candle you could see.
Observed OHLC facts and the zone or pattern definition you used.
Your interpretation, two possible scenarios and what could challenge them.
Your paper decision, pretend size, costs and planned loss assumptions.
The later outcome, actual hypothetical result and one lesson learned.

Review a sequence of examples rather than picking one success. Simulated results do not show how you would execute or feel with real money.

The plain-language glossary

Open: First price in the chosen candle period.
High: Highest recorded price in the period.
Low: Lowest recorded price in the period.
Close: Last price in a completed period.
Body: The section between open and close.
Wick / shadow: The thin section outside the body, extending to the high or low.
Range: High minus low.
UP / bullish candle: Close is higher than open; it does not describe every movement.
DOWN / bearish candle: Close is lower than open.
Doji: Open and close match or are very close.
Timeframe: The amount of time represented by one candle.
Swing: A local high or low area, usually recognized using later prices.
Trend: A rising or falling sequence in a specified view.
Pullback: A move against an earlier direction; its final size is unknown.
Support zone: An area where price previously paused or bounced after falling.
Resistance zone: An area where price previously paused or fell back after rising.
Anchor candle: A large-body reference candle used in the supplied book's heuristic.
Engulfing body: A body that covers the previous body under a stated definition.
Breakout: Movement beyond a selected boundary; definitions differ.
False break / failed breakout: A break that does not hold under the observer's stated rule.
Compression: Narrowing or smaller observed ranges.
Expansion: Larger observed ranges.
OHLC: Open, high, low and close.
Interpretation: A possible explanation of observations.
Forecast: An uncertain statement about what may happen next.
Hypothetical / paper: An invented or simulated example, not an executed trade.
Stop-market order: After triggering, it becomes a market order; the fill price is not guaranteed.
Stop-limit order: After triggering, it becomes a limit order and might not execute.
Costs: Charges and trading frictions that reduce a result.
Hindsight bias: Thinking the past outcome was obvious after you already know it.

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