Lesson 7 — Open, High, Low & Close
Learn how OHLC data creates a candlestick and tells the story of price movement.
What Is OHLC?
OHLC is one of the most important concepts in technical analysis. It describes four prices recorded during a selected trading period:
The Open Price
Opening price
The Open is the first recorded trading price for the selected period.
On a daily chart, it represents the opening price for that trading day. On a weekly chart, it represents the beginning of that trading week.
The High Price
Highest price reached
The High is the highest price reached during the selected period.
The Low Price
Lowest price reached
The Low is the lowest price reached during the selected period.
The Close Price
Closing price
The Close is the final recorded trading price for the selected period.
The relationship between the Open and Close helps us understand whether the period finished higher or lower than it started.
One Trading Day — Four Prices
We can now turn these four numbers into a visual representation called a candlestick.
From OHLC to a Candlestick
A candlestick is simply a visual way of displaying the four OHLC prices.
The Candle Body
The body represents the distance between the Open and Close.
A larger body means there was a larger difference between the opening and closing prices.
The Upper Wick
The upper wick shows the distance between the candle body and the High.
A long upper wick means price traded significantly higher before moving back down.
The Lower Wick
The lower wick shows the distance between the candle body and the Low.
Shows how far price travelled below the candle body.
Understanding the Full Trading Range
The distance between the High and Low represents the full price range during the selected period.
The share traded within a $3.20 range during the period.
Why the Close Matters
Technical analysts often give significant attention to the Close because it tells us where price finished after all the buying and selling during the period.
The Close is also used in many technical indicators and chart calculations.
OHLC Changes With the Timeframe
🇦🇺 Australian Market Example
Imagine an ASX-listed share has this daily OHLC data:
Because the Close is above the Open, the day produced a bullish candle.
But remember: one bullish candle alone does not guarantee that the share will continue higher.
🧠 OHLC Challenge
A share opens at $10.00, reaches $12.00, falls to $9.40 and closes at $9.80. Which statement is correct?
Lesson Complete!
You now understand how Open, High, Low and Close work together to create a candlestick.
Remember:
Open → High → Low → Close
Next lesson: What Is Trading Volume?
Every candlestick on a stock chart is built from four important price points: Open, High, Low and Close, commonly known as OHLC. Understanding these four values is one of the first essential skills for anyone learning technical analysis.
The Open tells us where the price started, the High shows the highest price reached, the Low shows the lowest price reached, and the Close tells us where the price finished during the selected timeframe.
What You Will Learn
- What Open, High, Low and Close mean
- How OHLC data creates a candlestick
- How the candle body represents the Open and Close
- What upper and lower wicks represent
- How to calculate the day’s price range
- Why the Close is important to technical analysts
- How OHLC changes across daily, weekly and monthly charts
- How to read OHLC data using an Australian market example
Australian Example
Imagine an ASX-listed share has the following daily prices:
Open: $14.50
High: $15.80
Low: $14.10
Close: $15.40
Because the share closed at $15.40 after opening at $14.50, the price finished the day higher than it started. This would normally be displayed as a bullish candlestick.
However, one bullish candle does not guarantee that the price will continue rising. Technical analysts consider OHLC alongside trend, volume, support, resistance and other market information.
Key Takeaway
Open → High → Low → Close = OHLC
Once you understand OHLC, reading candlestick charts becomes much easier.