Read the chart settings first
Identify the security or index, its currency and the dates shown. A daily candle summarizes one trading day; a weekly candle summarizes a week. A screen displaying six months of daily candles has a different interval from a screen displaying six years of weekly candles.
Check whether the current bar is finished. A live daily candle can change until the selected session ends. Including extended-hours trading changes the prices eligible to determine an open, high, low or close. Write down these settings before comparing two screenshots.
Choose the information you need
A common line chart connects closing prices. An OHLC bar and a candle show the open, high, low and close for each interval. They do not show every transaction or the order in which the high and low occurred. Color conventions depend on the platform.
Imagine two sessions both closing at $104. The first traded between $103 and $105; the second between $90 and $110. A closing-price line can put them at the same height while candles reveal very different ranges. Neither format changes the underlying observations.
Read distance in the right units
On a linear price axis, equal vertical distances represent equal dollar changes. On a logarithmic axis, equal distances represent equal proportional changes. A move from $20 to $40 and one from $40 to $80 both double the price, although their dollar changes differ.
Check adjustment settings around stock splits and distributions. An unadjusted two-for-one split can halve the quoted share price while doubling the share count. That discontinuity is not automatically a 50% economic loss. A price chart also need not include reinvested distributions; consult the provider’s series definition.
Describe the observation before the story
A useful first description is: the daily closing-price series made a new three-month high in this currency. That sentence names the interval, measure and window. It makes a smaller claim than saying the business improved or the next month must be positive.
For practice, hide later bars and describe only what was visible at the chosen date. Then compare the next observation with the original description. This helps separate recognition from hindsight and makes chart reading a reproducible exercise rather than a search for an attractive picture.
Two charts show the same stock, but one has weekly bars and the other daily bars. Should their candle shapes match?
Show the explanation
No. Each bar aggregates a different interval. Compare interval, session, currency and adjustment settings before treating a visual difference as contradictory evidence.
Sources and editorial notes
Original explanations and hypothetical examples prepared with AI assistance. Primary references checked October 16, 2026. Numerical examples are hypothetical unless explicitly identified otherwise.
- Charles Schwab: How to Read Stock Charts and Trading Patterns
Line, OHLC bar and candle representations; observation intervals; false signals and limits of technical analysis. Original settings exercises and failure rules are Academy examples.
- StockCharts ChartSchool: Introduction to Candlesticks
OHLC body/wick construction, doji and spinning-top geometry and context. No third-party images or price histories reproduced.