OHLC Explained — Where a Candle Actually Comes From

Direct answer

OHLC stands for Open, High, Low, Close — the four prices that summarise all trading in one time interval. Open is the first trade price in the interval, High and Low its extremes, Close the last trade price. OHLCV adds Volume, the quantity traded in that same interval. Each record is built by aggregating individual trades into a fixed time bucket.

How a candle is actually built

Start from what a market really produces: a stream of individual trades, each with a price, a quantity, and a timestamp.

To build a one-hour candle, an exchange takes every trade whose timestamp falls in that hour and reduces them:

open   = price of the first trade in the interval
high   = max(price) across the interval
low    = min(price) across the interval
close  = price of the last trade in the interval
volume = sum(quantity) across the interval

Five numbers replacing potentially thousands of trades. That compression is the entire value of a candle, and the entire source of its ability to mislead.

What the compression hides

Consider two one-hour candles that render identically: open 100, high 105, low 98, close 103.

• Candle A was built from 3,000 trades, price moving continuously through the range.
• Candle B was built from 4 trades: one at 100, one at 105, one at 98, one at 103.

The chart cannot tell them apart. They are drawn the same way, at the same size, in the same colour. But A describes a functioning market and B describes almost nothing — four transactions, possibly by two people, on a book with essentially no depth.

This is why thinly traded tokens produce charts that look like real technical patterns and are not. There is no pattern; there are a handful of trades and a lot of interpolation by your eye.

CoinDock exposes what most charts hide

CoinDock's candle records carry two fields beyond OHLCV that answer exactly this:

trades_count — how many trades built the candle. This is the number that distinguishes A from B above, and most charting interfaces never show it.

is_closed — whether the interval has finished. An open candle is still changing: its close is the last trade so far, and its high and low can still extend. A pattern that appears on an unclosed candle may not exist once it closes.

Both are returned by the candles API, across the intervals 1m, 5m, 15m, 30m, 1h, 4h, 1d, 1w.

Practical rule: before reading anything into a candle on an unfamiliar market, look at its trade count. A shape built from single-digit trades is not a signal, whatever it resembles.

Base volume and quote volume

Volume is ambiguous unless you say which asset it is measured in, and CoinDock records both:

• volume_base — quantity of the base asset traded. In MLRT/USDT, that is MLRT.
• volume_quote — value traded in the quote asset, i.e. USDT.

These tell different stories. Base volume is comparable over time for the same pair regardless of price. Quote volume is comparable across pairs, because it is denominated in a common unit.

Comparing raw base volume between two tokens at very different prices is meaningless — 1,000,000 units of a token worth 0.0001 is 100 USDT of activity.

Why the same market differs between venues

Two exchanges can show genuinely different candles for the same token, without either being wrong:

• They matched different trades. Each venue's candles are built from its own order flow only.
• Interval boundaries and time zones differ. A "daily" candle starting at 00:00 UTC differs from one starting at exchange-local midnight.
• Empty-interval handling differs. With no trades, some venues emit no candle, others carry the previous close forward as a flat zero-volume candle. On a thin pair these produce visibly different charts.
• Timestamp convention differs. Some label a candle by its open time, others by its close.

None of this matters much on a deep market. On a thin one it can change the chart's apparent shape entirely.

Reading an OHLC bar versus a candlestick

Both encode the same four numbers with different visual grammar:

Candlesticks emphasise the open-to-close relationship through body size, which is why they dominate. They contain no extra information.

Common mistakes

• Reading a candle as a path. It tells you four prices, not the order they occurred in between open and close.
• Trusting patterns on low-trade-count candles. Check trades_count.
• Reading an unclosed candle as final. Check is_closed.
• Comparing base volume across different tokens. Use quote volume.
• Assuming two venues should agree. They aggregate different trades.

Related

• How to Read an OHLC Bar
• Candlestick Chart Guide
• Crypto Volume Explained
• What Is Liquidity — why thin books produce misleading candles.