Seaside Town · Camp 1 · Harbor
The language of candles
The heart of the town is the fish auction. Every morning, the price is born right here, out of the haggling between buyers and sellers. Nazım will show you how all that haggling gets written into a single candle.
The camp's rules
- 01
Each candle sums up one period: open, high, low and close.
- 02
The body is the stretch between the open and the close. The wicks show where price went but couldn't hold.
- 03
Green candle: the close is above the open, so buyers finished ahead. Red candle: sellers finished ahead.
- 04
The color is the score; the wicks tell you how the game was played. A long wick is price that was tried in that direction and rejected.
- 05
The timeframe is how closely you're looking at the chart: four M15 candles make one H1 candle.
Teaching
Four numbers, one story
Every candle sums up what happened in your chosen timeframe with four prices: open, high, low and close.
Remember yesterday's auction: it opened at 100, touched 108, dropped to 96 and closed at 105.
Nazım · Lighthouse keeper
Body and wicks
The thick part between the open and the close is the body. It shows who finished ahead in that period, and by how much.
The thin lines above and below the body are the wicks. A wick says price got that far but couldn't hold on there.
Nazım · Lighthouse keeper
A wick is an attempt
Long upper wick: buyers pushed price up, but sellers pushed it back down.
Long lower wick: sellers pushed price down, but buyers took it back.
A wick is the trail the loser leaves behind. Whichever way the wick is long, the attempt in that direction was rejected.
Nazım · Lighthouse keeper
The color is the score, the wicks are the game
Think of the color as the final score: who finished ahead?
The length of the body is the margin: a long body is a blowout, a short body a narrow win.
The wicks are the attacks during the game: who went for it, and who got pushed back? A good reader looks at the score and at how the game was played.
Nazım · Lighthouse keeper
Focusing the spyglass
From the top of the lighthouse, the sea looks like one big swell. From the pier, you see every little wave.
Timeframes work the same way: on M5 each candle sums up 5 minutes, on M15 it's 15 minutes, and on H1 a whole hour.
The market is the same. The only thing that changes is your distance.
Nazım · Lighthouse keeper
Four candles, one candle
Merging four M15 candles into one H1 candle is easy: the open is the first candle's open, and the close is the last candle's close.
The high is the highest of the four, and the low is the lowest.
Nazım · Lighthouse keeper
How far back are you standing?
Puzzles come from M5, M15 and H1 charts, and the title always tells you which one.
A smaller timeframe means more candles and more noise. A bigger timeframe has fewer candles, but each one says more.
Before you read a pattern, know how far back you're standing.
Nazım · Lighthouse keeper
Lessons · 5
- Story
Arriving in town
Meet Nazım, Sultan and Deniz, and see where price comes from.
- Lesson
Anatomy of a candle
Read the open, high, low and close at a glance.
- Lesson
Colors and wicks: who won?
Read who won the haggle from a candle's color and wicks.
- Lesson
Timeframes
See how M5, M15 and H1 show the same market from different distances.
- Exam
Harbor exam
Put the language of candles to the test: read Sultan's ledger.
Test yourself
On a red candle, what does the top of the body show?
- ✓ The open
- · The close
- · The high
A red candle closes lower than it opened. So the top of the body is the open and the bottom is the close. The high is the tip of the upper wick.
A candle opens at 100, has a high of 103 and a low of 92, and closes at 101. Which wick is longer?
- · Upper wick
- ✓ Lower wick
- · They're equal
The body runs between 100 and 101. The upper wick goes from 101 to 103 (2 points), the lower wick from 100 down to 92 (8 points). Sellers pushed price all the way to 92, but buyers took almost all of it back.