Trading practice
Candlestick practice
Read candle anatomy, compare reversal-pattern conventions and recognise what OHLC data cannot establish.
5 exercises in this set. No sign-up required.
Before you begin
Use the stated numerical definitions and the completed bars shown. These original examples use hypothetical price units. A pattern label describes observations; it does not establish a profitable trade or predict the next candle.
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0 of 5 exercises reviewed on this visit
Exercise 1 · Hypothetical example
Under the stated rule, which description fits this completed candle?
One hypothetical 15-minute candle has open 100.00, high 103.00, low 98.00 and close 100.10. For this exercise only, call a candle doji-like when its real body is no more than 10% of its high-to-low range. This threshold is an explicit study convention, not a universal market rule.
Read the 1 displayed observations as a table
Original hypothetical data. Price units follow the scenario. Observation numbers show sequence, not elapsed time. Only the initial observations are included.
| Observation | Open (O) | High (H) | Low (L) | Close (C) |
|---|---|---|---|---|
| 1 | 100 | 103 | 98 | 100.1 |
Worked explanation
Real body = |100.10 − 100.00| = 0.10. Range = 103.00 − 98.00 = 5.00. Body share = 0.10 ÷ 5.00 × 100 = 2%, below the exercise’s 10% threshold. The upper wick is 2.90 units and the lower wick is 2.00. There is no preceding trend or later confirmation here, so do not turn the shape into a reversal claim.
Exercise 2 · Hypothetical example
What is the most defensible description of the final candle and its context?
Three hypothetical 15-minute candles are shown in chronological order. The final candle opens at 100.00, reaches 101.20, falls to 96.00 and closes at 101.00. Use a hammer-shaped convention of a lower wick at least twice the body and a small upper wick. The preceding two closes are 105.00 and 100.00.
Read the 3 displayed observations as a table
Original hypothetical data. Price units follow the scenario. Observation numbers show sequence, not elapsed time. Only the initial observations are included.
| Observation | Open (O) | High (H) | Low (L) | Close (C) |
|---|---|---|---|---|
| 1 | 108 | 109 | 104 | 105 |
| 2 | 105 | 106 | 99 | 100 |
| 3 | 100 | 101.2 | 96 | 101 |
Worked explanation
The final body is 1.00 unit. Lower wick = min(100.00, 101.00) − 96.00 = 4.00; upper wick = 101.20 − max(100.00, 101.00) = 0.20. The local sequence fell before this bar. A research plan would still need a later confirmation condition, an invalidation rule and execution assumptions; the wick alone supplies none of those.
Exercise 3 · Hypothetical example
Using shape and the stated preceding decline, which label is appropriate?
Two completed hypothetical 15-minute bars are shown. A separately observed decline precedes them. The final bar has open 100.00, high 105.00, low 99.80 and close 101.00. Treat a dominant upper wick after a decline as an inverted-hammer candidate; a similar shape after an advance is commonly called a shooting-star candidate.
Read the 2 displayed observations as a table
Original hypothetical data. Price units follow the scenario. Observation numbers show sequence, not elapsed time. Only the initial observations are included.
| Observation | Open (O) | High (H) | Low (L) | Close (C) |
|---|---|---|---|---|
| 1 | 104 | 105 | 99 | 100 |
| 2 | 100 | 105 | 99.8 | 101 |
Worked explanation
Body = 101.00 − 100.00 = 1.00. Upper wick = 105.00 − 101.00 = 4.00; lower wick = 100.00 − 99.80 = 0.20. The candle tests higher prices but closes below its high. That observation can be studied in context; it does not justify a guaranteed upward or downward trade.
Exercise 4 · Hypothetical example
Does the second candle meet the stated bullish body-engulfing rule?
These are two consecutive hypothetical hourly candles. First: open 104.00, high 105.00, low 101.00, close 102.00. Second: open 101.50, high 104.80, low 101.20, close 104.50. The exercise rule requires a bearish first body followed by a bullish body whose open is below the first close and whose close is above the first open. It does not require engulfing both wicks.
Read the 2 displayed observations as a table
Original hypothetical data. Price units follow the scenario. Observation numbers show sequence, not elapsed time. Only the initial observations are included.
| Observation | Open (O) | High (H) | Low (L) | Close (C) |
|---|---|---|---|---|
| 1 | 104 | 105 | 101 | 102 |
| 2 | 101.5 | 104.8 | 101.2 | 104.5 |
Worked explanation
First body: 102.00–104.00, with a lower close. Second body: 101.50–104.50, with a higher close. Since 101.50 < 102.00 and 104.50 > 104.00, the body condition is met. The second range 101.20–104.80 does not contain the first range 101.00–105.00. There is no earlier trend or later price evidence in this two-bar sample.
Exercise 5 · Hypothetical example
Can this single bar establish whether the stop level or target level was touched first?
A hypothetical hourly bar opens at 100, reaches a high of 106 and a low of 94, then closes at 102. Imagine a study position already open at the bar’s start with a stop level of 95 and a target level of 105. For this question, compare price-level touches only; the chart is not proof of executable bid/ask fills.
Read the 1 displayed observations as a table
Original hypothetical data. Price units follow the scenario. Observation numbers show sequence, not elapsed time. Only the initial observations are included.
| Observation | Open (O) | High (H) | Low (L) | Close (C) |
|---|---|---|---|---|
| 1 | 100 | 106 | 94 | 102 |
Worked explanation
The low of 94 is below 95 and the high of 106 is above 105, so the recorded range spans both levels. Routes such as 100 → 106 → 94 → 102 and 100 → 94 → 106 → 102 share the same OHLC values. They imply different first touches. Choosing the profitable ordering after seeing the bar would introduce favourable hindsight into a test.
Prepared by InsomniCapital, checked 2 October 2026. Original hypothetical exercises; source explanations and limitations are available in the companion guide. Risk disclosure.