🕯️ How to Read Charts

~9 min read · For reference, not a prediction

What a Single Candle Tells You

When you first open a coin chart, the screen is packed with red and blue bars, and it can feel overwhelming. Each of these bars is called a 'candle' (candlestick).

The name comes from its shape, which looks like a candle with a body and a wick. A single candle sums up 'how the price moved over a set period of time' into one simple picture.

Each candle holds four pieces of price information: the open (the price at the start of that period), the close (the price at the end of that period), the high (the highest price during that period), and the low (the lowest price during that period).

Together, these four are also referred to by the abbreviation OHLC (Open, High, Low, Close). It comes up a lot when you read chart explanations, so it's worth getting familiar with.

Body: the thick part between the open and the close. It shows where the price started and where it ended up over that period.
Wick (or tail): the thin line poking out above and below the body. The tip of the upper wick is the high, and the tip of the lower wick is the low. Think of it as a trace of price that briefly went somewhere and came back.
Color: if the close is higher than the open (the price rose), the candle is usually green or white, and this is called a bullish candle. If the close is lower than the open (the price fell), it's usually red or black, and this is called a bearish candle.

⚠️ The common Korean convention of 'red = up, blue = down' is often the opposite on global charts. Tools like TradingView default to green = up, red = down.

⚠️ So instead of judging up or down by color alone, it's safer to build the habit of checking the position of the body (whether the close is above or below the open). You can also change the colors in the settings.

💡 A long body means the price moved strongly in one direction during that period, while a long wick means the price went one way and then came back. For example, a very long lower wick shows the price dropped a lot and then recovered.

💡 That said, this is only a record of 'how it moved in the past' — it doesn't tell you where it will go next. It's best not to read too much meaning into the shape itself.

Time Frames: Is One Candle a Minute or a Day?

The most confusing part here is 'exactly how much time does one candle represent?' The answer is 'as much as the time unit you choose.'

At the top of the chart there are buttons like 1m, 15m, 1h, 4h, and 1D — these are called 'time frames.' Depending on which one you tap, the amount of time each candle covers changes.

Label	Time per candle	Who mainly uses it
1m	1 minute	Very short-term traders and scalpers
15m	15 minutes	People watching intraday flow
1h	1 hour	Reading the flow over a few days
4h	4 hours	The bigger flow on a weekly scale
1D	1 day	Major trends and a long-term view

For the same coin at the same moment, the 1-minute chart looks very choppy, while the daily chart (1D) shows only the calm, broad flow. Both plot the same price — the only difference is 'how far away you're looking from.'

A big swing on the 1-minute chart can be compressed into a single small wick on the daily chart. So the same price can feel quite different depending on the time frame.

💡 The more of a beginner you are, the easier it is to feel rushed and anxious if you only watch short candles like the 1-minute chart, because the price keeps shaking. Short candles carry a lot of noise (meaningless little fluctuations).

💡 So at first, I recommend looking at the 'big picture' on a longer time frame like the 1-hour (1h) or daily (1D) chart first. Once you're comfortable, adding shorter candles on top feels much easier on the mind.

Volume Bars: Another Layer of Information Beneath the Price

If you look below the candlestick chart, there's usually a separate row of small bars. This is the 'volume.' Its height shows how much was bought and sold during that period.

The taller the bar, the more active trading was during that period. Reading it together with the price bars (candles) as a pair makes the flow easier to see.

Volume matters because it tells you 'how many people took part' in a price move. The same-sized price rise can mean different things.

A rise on high volume means many participants moved together, while a rise on low volume means only a few moved, so the move may be weak — that's one way people read it.

If the price moved a lot and volume was also high, the move is often read as having real force behind it.
If the price moved but volume was lower than usual, it's sometimes seen as less reliable because participation was thin.
If a volume bar spikes unusually long compared to normal, there may have been some big event or piece of news.

⚠️ Volume interpretation is only a 'tendency,' not a rule. High volume doesn't guarantee a trend continues, and low volume doesn't guarantee it reverses. Treat it as just one reference indicator among many.

Support and Resistance: Where the Price Often Stalled

After watching a chart for a while, you may notice ranges where 'the price keeps stalling around this level.' Marking these spots gives you support and resistance lines.

It sounds like a difficult concept, but it's really just the simple idea of 'price ranges where people frequently bought and sold in the past.'

Support: a lower price range where the price, after falling, keeps 'stopping here and rising again.' Think of it as a floor that props the price up.
Resistance: an upper price range where the price, after rising, keeps 'getting blocked here and falling again.' Think of it as a ceiling.

These lines aren't absolute — they're drawn by eye at spots where the price reacted several times in the past. So different people may draw them slightly differently.

Keep in mind that there's no 'correct line' already drawn on the chart for you. They're guide lines you draw yourself, purely for reference.

💡 In a tool like TradingView, you can draw lines yourself with the Horizontal Line tool. If you draw a line at a price range where the price stalled two or three times or more in the past, it gives you a reference point: 'ah, people often reacted around here.'

⚠️ Support and resistance lines often 'break.' There's no eternal floor and no eternal ceiling. It's common to buy believing a level is support, only to watch the price keep falling right through it.

⚠️ These aren't walls that block out the future — they're just a reference to 'where the price often stalled in the past.' Don't conclude things like 'this is support, so I can just buy here.'

Trends and Moving Averages: Seeing the Flow at a Glance

A trend is the overall direction the price is heading. It can be broadly divided into three types.

When the peaks (highs) and valleys (lows) keep getting higher, it's an uptrend; when they keep getting lower, it's a downtrend; and when the price moves back and forth within a similar range, it's sideways (a flow that crawls along horizontally).

Uptrend: both the highs and the lows climb steadily, like steps going up.
Downtrend: both the highs and the lows fall steadily.
Sideways: the price moves horizontally within a set range with no clear direction. Also called a 'range' or 'box.'

When a trend is hard to gauge by eye alone, the moving average (MA) helps. It's a smooth curve made by averaging the closing prices over a recent set period and connecting the dots.

It smooths out the jaggedness of price to make 'roughly which direction it's going' easier to see. For example, the 20-day moving average is a line drawn each day by connecting the average of the most recent 20 closing prices.

MA (simple moving average): the plain average of closing prices over the period. This is the most basic one.
EMA (exponential moving average): puts more weight on recent prices, so it reacts faster to recent changes than the MA.
If the line points up, you can roughly read the flow over that period as rising; if it points down, as falling.
The larger the period number (e.g., 20, 50, 200), the longer and bigger the flow it shows; the smaller it is, the shorter and more sensitive the flow.

💡 A moving average always moves 'a beat behind' the price. That's because it's an average of past prices. So it's good for calmly observing the flow, but it can't tell you in advance the exact moment a direction is about to change.

💡 It fits best to think of it as a 'reference line that trails behind.' Just remember that these lines aren't arrows pointing to the future.

What Charts Can Tell You, and What They Can Never Tell You

If you've followed along this far, you can now read candles, time frames, volume, support and resistance, trends, and moving averages all on one screen. But the most important thing is this final point.

A chart is only a record of 'what has already happened' — it doesn't guarantee 'what will happen next.' Miss this, and the chart can actually become poison.

How the price moved in the past (whether it rose or fell, and how much it swung).
The moments when trading was active and the moments when it was quiet.
The price ranges where people often reacted in the past (support and resistance).
Roughly which direction the flow has been heading so far (the trend).

Whether the price will rise or fall tomorrow or in the next hour — a chart doesn't reveal the future.
Any guarantee like 'when this shape appears, it always goes up' — there's no such 100% pattern.
Off-chart variables like news, policy, and large flows of money — they can suddenly flip the entire flow.

⚠️ Statements like 'this candle pattern showed up, so it'll rise soon' or 'this is support, so I can just buy here' are expressions that declare the future as certain. Even when the same shape appears, the outcome is different every time.

⚠️ A chart is a tool for referencing probabilities and distributions, not a prophecy that predicts the future. Be especially careful of places (such as paid trading-tip groups) that make such definite claims while urging you to buy or sell.

💡 The healthiest way to use a chart is as a 'tool for calmly reading the current situation,' not a 'tool for predicting the future.' Baro only shows you, as a distribution, how similar situations played out in the past — it doesn't call 'up' or 'down' for you.

💡 If this chart leads to actual trading, take a look at the How to Trade Futures guide as well for concepts like entry, exit, and leverage. Remember that the final decision and responsibility are always yours, and learn slowly, within an amount you can afford to lose.

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