Granthara04.01.03Range and relative candle size

Every price in Part 04 comes from an unnamed vegetable market and is a teaching example. Nothing here is a quote, a recommendation, or a record of any listed company.

04.01.03 · Range and relative candle size

PreviouslyA body is what the session kept; a wick is what it visited and handed back.

There is no such thing as a big candle.

Rahul has been coming to the market for a fortnight and Tuesday felt enormous — the price moved nearly two rupees while he was choosing his sacks. Lakshmi has been here eleven years. She says it was a Tuesday.

Only a candle bigger than the ones beside it. Size is a comparison, and the comparison is never on the chart.

Updated

₹1.80
six times a quiet fortnight's daily travel, and three-quarters of a stormy one's
Part 04 · Anatomy and Force
  1. 04.01.01 How to read a candlestick: the four numbers
  2. 04.01.02 Body vs wick: intent vs rejection
  3. 04.01.03 Range and relative candle size
  4. 04.01.04 Close location within range: the single most useful candle metric
  5. 04.01.05 Reading a candle as a story of the session
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Learn

The range, and the question it invites

The distance from the lowest price to the highest is the range. Tuesday's was ₹23.40 − ₹21.60 = ₹1.80, and it is the simplest measurement on the board.

It also invites the first question everybody asks, which is whether that is a lot. The honest answer is that the number cannot tell you, because ₹1.80 is not a size, it is a size in a context that is not written down.

Rahul's fortnight averaged about thirty paise of daily travel. Against that, Tuesday is six times a normal day and the largest anything has moved since he started coming. In a stormy fortnight averaging ₹2.40, the identical board is three-quarters of an ordinary day and nobody would look at it twice.

See it

The same Tuesday, two fortnights

The last candle is the same four numbers in both, drawn on the same scale. Only the days beside it change.

Both drawings use one fixed scale, so the Tuesday candle really is the same size in each. What changed is only what it is standing next to.

Learn

What the comparison has to be against

Two things, and both of them matter.

Its own recent neighbours. The sessions immediately around it on the same board, usually the last ten or twenty. This is what almost every pattern definition in Part 04 means when it says a long body or a small range.

Its own instrument. ₹1.80 on onions is not ₹1.80 on cardamom, and a rupee on a ₹20 vegetable is not a rupee on a ₹2,000 one. Comparing the rupee sizes of two different things is the mistake 03.01 named on a chart: two raw series with different levels do not compare.

Both of those are reasons the comparison is relative to the board you are on. There is no rupee figure, in any book, above which a candle is large — and a source that gives you one has quietly chosen a comparison and not told you what it was.

Every definition later in this Part that says long, small, or wide means long, small or wide compared with the sessions around it.

Tuesday's ₹1.80, against two fortnights
Tuesday's range
₹1.80
Average daily range, the quiet fortnight
₹0.30
Tuesday, in that context
6× a normal day
Average daily range, the stormy fortnight
₹2.40
Tuesday, in that context
0.75× — smaller than normal
6×and 0.75× — the same candle, both times
0rupee figures that make a candle large
Try it

You are shown a single candle with a range of ₹1.80 and no other information. What can you say about its size?

Try it

Which of these is a fair comparison for Tuesday's ₹1.80?

The average daily range of the last twenty sessions on the same board
The range of a cardamom auction on the same day
The largest range this board has seen in the last six months
A figure from a book saying candles above ₹2 are significant
The same board's ranges a decade ago
Yesterday's range on the same board

Lakshmi's answer to "was that a big day?""Compared with the fortnight, yes. Compared with Diwali week, no." Both halves of that sentence are doing necessary work.

Range says how far. The next lesson is about the one measurement that says where the session left off — and it is the number the whole of Part 04 turns out to be built on.

Remember

Candle size is a comparison and never a measurement on its own: the same ₹1.80 range is six times a normal day in a quiet fortnight and three-quarters of one in a stormy fortnight, so every later definition that says long or small means long or small against the sessions beside it.

Everything this chapter has told you, in order

  1. 04.01.01Four numbers survive a whole session, and knowing what was rubbed out is most of the skill.
  2. 04.01.02A body is what was kept; a wick is what was visited and handed back.
  3. 04.01.03There is no such thing as a big candle — only a candle bigger than the ones beside it.
Next
04.01.04 — Close location within range: the single most useful candle metric

Next: of the four numbers, the one that carries the most.