The parts of a bar, and what each one decides

What it means

A candle — a bar — is one period of trading summarised as four prices and a volume: where the period opened, the highest and the lowest it traded, where it closed, and how much changed hands. The body is the distance between the open and the close; the thin lines reaching above and below it, the wicks, run out to the high and the low.

The wicks and the body are not decoration. A long upper wick says price traded up there and did not stay; a close near the top of the range says it did. Which of the two a rule consults is what that rule is able to see, and it is the reason two rules can look at the same bar and record different things.

How we detect it

This engine reads six fields per bar and no others: the bar's opening time in UTC, the open, the high, the low, the close and the volume. Nothing is interpolated and no seventh field is derived. A period that arrives incomplete stays a gap, and the answer says a gap is there rather than filling it.

The high and the low do the locating. A swing high is a bar whose high stands above the highs of the two bars on each side of it, a swing low the mirror of that, and the support and resistance zones are clustered out of those swing prices. The map of levels this publication draws is therefore drawn from wicks.

The close does the deciding. A breakout or a breakdown is recorded only when a bar CLOSES beyond the zone; a retest only when a bar dips into a broken zone and closes back outside it; and in the displacement family a swing is broken by a close and never by a wick through it. RSI, MACD and the middle Bollinger line are computed from closes alone.

The open is consulted in exactly three places, and each time it answers one question — did this bar finish above or below where it started. Whether a gap between two bars was left by an up bar or a down bar; which bar was the last one moving the other way before a move began; and, together with the high, whether a bar's upper wick is longer than its body. That last comparison is the whole of the rejection test: the high minus whichever of the open and the close is higher, greater than the distance between the open and the close, at a resistance zone, with the close back below it.

The low and the close together are the sweep test at support — a bar whose low is under the zone and whose close is back above it. Volume is read as one number against the average of the previous twenty bars. The true range, high to low and extended to the previous close when the period gapped, is the unit every threshold on this site is measured in.

When the read carries information

• The bars are the period they claim to be. Every rule here compares a bar with its neighbours, so a series that mixes periods, or that is missing bars in the middle, produces comparisons between things that are not alike.
• There are enough of them. Thirty bars is the minimum for any read at all, and the swing rule cannot label the last two bars of a series, because a swing needs two bars after it before the chart has drawn one.
• The close is a real close. On the most recent, still-forming bar the close is the current price and can still move, which is why a read taken part-way through a period can differ from the same read after it ends.

When it misleads

• This engine names no candlestick patterns. There is no hammer, no doji and no engulfing bar anywhere in it. The only thing it measures about a single bar's shape is whether the upper wick is longer than the body, and it asks that only at a resistance zone. A reader who arrives expecting pattern recognition should know it is not here.
• That body-and-wick comparison has no lower-wick twin. A long lower wick into support with a close back above it is not recorded as a rejection: at support the sweep rule covers part of that ground and the rejection rule covers none of it. The asymmetry is in the code, not in the market.
• A bar is a summary, and summaries lose the order things happened in. A period that fell and recovered and a period that rose and gave it back can produce the same four prices, and nothing here can tell those two apart. Every read on this site sits inside that boundary, and it is why the finer ones are described as approximations rather than observations.
• Volume is compared with twenty bars of its own recent history and with nothing else — not with the same hour on other days, and not across venues. A quiet bar in a normally quiet period reads the same as a quiet bar in a busy one.

How it reaches you

No answer on this site prints a paragraph about a single bar. This vocabulary reaches a reader inside other lines — an upper wick into the resistance zone with a close back below it, a close above the resistance zone, a wick that swept below the support zone before closing back above it. This page is where those words are defined.

The shape of one bar is never treated here as a reason to act. Where it enters an answer it is a description of what happened during that period, offered for market-reference purposes, and it is written as something to monitor rather than something to do.