A candle is a range, not a shape. The 1, 2u, 2d, and 3.
Lesson 1 — What a candle tells you
A candle isn't a picture. It's four facts about one window of time: where price opened, the highest anyone paid, the lowest anyone sold, and where it closed. Price only moves when someone gets aggressive — a buyer lifts the offer or a seller hits the bid — so the high is the most aggressive buyer's reach and the low is the most aggressive seller's.
The only question
Compare any bar to the bar before it. Did it take the prior bar's high? Did it take the prior bar's low?
| Took prior high? | Took prior low? | Type | Meaning |
|---|---|---|---|
| No | No | 1 — inside bar | Compression. A decision is pending. |
| Yes | No | 2u — directional up | Participation to the upside. |
| No | Yes | 2d — directional down | Participation to the downside. |
| Yes | Yes | 3 — outside bar | Broadening. Both sides ran. |
There is no fourth answer. The break decides the type, never the color. A red bar that took the prior high and not the low is a 2u.
Three things that follow
- A 1 can only become a 2 or a 3. When it does, the direction of the break is information.
- A 2 that later takes the other side becomes a 3 — and once a 3, always a 3 for that bar.
- Because there are only three types, there is a finite set of ways price can reverse. That's Lesson 4.
Where you see it in the app
Bar types print under every candle on Charts (Strat numbers), on the screener's candle column, and in Sage's chart reads. Two-bar sequences like 2u-2u or 3-2d are the pattern vocabulary used everywhere.
Do this today
Open any chart. Label twenty consecutive bars as 1, 2u, 2d, or 3 by hand. Then turn on Strat numbers and check. Do it on two timeframes. When you can do it on a 1-minute chart without thinking, you have the alphabet.