Trading · 68 / 86 · 2 min
Charts
A candle is a picture of the price over some minutes. It shows where trades happened. It does not show the future, and it does not show who was painting it.
A candle shows where trades happened. It does not show the future, and it does not show who was on both sides.
A worked case
A pattern is given a name and treated as a prediction. The next candles do something else. The named pattern was a description of old trades. The buyer paid for a forecast the picture did not contain.
What it is
Open, high, low, close. That is the candle. A pattern is a name people give a cluster of candles after the fact.
What it cannot tell you
It cannot tell you the next candle. It cannot show fake volume by itself. It cannot include the fee you will pay.
Anyone selling a shape as a signal is selling the guru product. Use the chart to see what already happened, then run the check.
A candle is a history
A candlestick is a picture of the price over some minutes: where it opened, where it closed, how far it stretched. Japanese rice traders used a version of this centuries ago. None of that history makes the next candle a conclusion. In crypto the picture has a further problem. The volume course is about paint. A candle can be the record of two wallets trading with each other. It is still a real picture of those trades. It is not a picture of a crowd, and it is not a picture of tomorrow.
Patterns with names are descriptions that schools sell as forecasts. Some will have matched the next move in a backtest that ignored fees. The backtest course is next to this one for a reason. A named pattern does not owe you a fill.
Use a chart to see what already happened and whether the book was thin. Do not use it as a person who knows the future. It does not know who was on both sides, either, unless you go and look.
Read it yourself
These links are the record. They are not a recommendation, and they are not instructions. A news story or a court paper can still be wrong about a detail. The check does not change because a famous name is in the story.
Apply the check
Open a question. The line is about this topic. It is not a verdict that anything is safe.
Whoever sold you the course about the pattern. The market does not pay you for recognising it.
Nobody. A candle does not become a rule.
The next trade, which the candle does not control.
Check yourself
Does a familiar pattern mean the trade is good?
No. It is a description of the past, and it ignores fees.
After this you can describe a candle without predicting the next one.