Recommended resources
The freely available resources this lesson will direct you to.
Welcome back. Last time, you read a quote as a snapshot: the last traded price records a completed trade, while the bid and ask show currently displayed orders. A chart answers a different question: what happened across a series of time intervals?
In this lesson, you will read the open, high, low, close, and volume—often shortened to OHLCV—for one interval, then find those values on a price chart. This is the chart-reading foundation you will need before using an intraday trading workspace.
A chart compresses many trades into one interval
A quote’s last traded price can change with every trade. A five-minute chart groups trading into five-minute intervals, usually displaying one price mark and one volume bar for each interval. A daily chart does the same for each trading day. The horizontal axis shows time; the price scale shows price.
For any completed interval:
- Open (O): the price at the start of the interval.
- High (H): the highest price reached during it.
- Low (L): the lowest price reached during it.
- Close (C): its closing price.
- Volume (V): the number of shares traded during it.
Watch How to Read a Stock Chart from Charles Schwab for a compact visual introduction. Its examples use a different market, but the chart-reading principles apply to Indian equities.
Watch how the video locates price, time, OHLC, and volume before it introduces price bars and candlesticks.
Watch chart axes for the time and price scales and the volume panel. Continue with OHLCV labels to see where a platform may display the interval's numbers. Finish with price marks, focusing on how bars and candles display information that a closing-price line omits.
Suppose a completed five-minute interval for a hypothetical Indian stock has O ₹840.20, H ₹844.00, L ₹838.00, C ₹842.00, V 12,000. It opened at ₹840.20, traded as high as ₹844.00 and as low as ₹838.00, and closed at ₹842.00; 12,000 shares changed hands during those five minutes. OHLC tells you the interval’s endpoints and extremes, not the order in which the high and low occurred.
Reading the price mark
A candlestick makes four prices visible at once. Its rectangular body spans the open and close. Thin extensions, called wicks or shadows, reach the high and low. On a candle that closes above its open, the open is at the body’s bottom and the close at its top. When it closes below its open, those positions reverse. Sometimes a wick is absent because the high or low coincides with a body edge.
A traditional OHLC bar shows the same four prices differently: the vertical line runs from low to high, a short tick on the left marks the open, and a tick on the right marks the close. A line chart generally connects closing prices, so you cannot read the open, high, and low from the line alone.
Read Zerodha Varsity’s Technical Analysis - Part 1 for the candle anatomy and its explanation of how the selected timeframe changes what a candle represents.
Zerodha Varsity illustrates the body and shadows with price examples, then shows how the same reading method applies across timeframes.
In Chapter 3, Section 3.4, “Candlestick Anatomy” (pp. 16–19), begin where the text introduces bullish and bearish candle colors. Read candle anatomy through the summary after the two price examples. Focus on which body edge is the open for each type of candle. Then, in Section 3.5, “A note on time frames” (pp. 19–21), start at the definition of a timeframe and read timeframe examples through the comment following Table 3.2. Focus on how one candle changes meaning when you change the chart interval; you need not adopt a trading timeframe yet.
Do not rely on color alone to find the open and close. Chart platforms offer different color settings, and some use fill and color to convey different comparisons. First inspect the platform’s convention or the displayed O and C values. The reliable comparisons are numerical: a close above the open means the price finished that interval higher than it began; a close below the open means it finished lower.
The interval changes the meaning
On a daily chart, one candle summarizes a trading day. On a five-minute chart, one candle summarizes five minutes. The open of a five-minute candle is not necessarily the day’s open, nor is its close necessarily the day’s close. Read the chart’s timeframe label before reading its candles.
On a live chart, the current interval may still be forming. Its open is established, but its high, low, displayed close, and volume can change as trades occur. A candle’s final OHLCV values are known only when that interval is complete. This also explains why the LTP from the previous lesson and the close of an earlier candle can differ: one is the latest trade now; the other belongs to a particular interval.
Daily closing values warrant one further distinction. A chart may show an exchange’s official daily close, which need not be identical to the final individual trade. For chart reading, use the close reported for that candle rather than assuming it is always the day’s last transaction price.
Match the volume bar to the price interval
Volume is usually plotted in a separate panel below price. A volume bar aligned under a five-minute candle counts shares traded in those five minutes; a bar under a daily candle counts shares traded that day. Read its height against the volume scale, not the price scale.
In the previous lesson, you saw that a quote may display today’s cumulative volume so far. An individual intraday volume bar is different: it covers one chart interval. Trades add to the day’s cumulative total, but you should not read each five-minute bar as the running daily total. And a trade of 100 shares contributes 100, not 200, to volume: there is both a buyer and a seller, but only 100 shares change hands.
Read the opening of the “Volumes” chapter in Zerodha Varsity’s Technical Analysis - Part 2 to connect per-trade quantity with a cumulative daily figure.
The “Volumes” chapter works through matched trades and a running daily total. Use it to separate traded shares from the waiting order quantities you saw in market depth.
In the chapter titled “Volumes” (pp. 22–24), begin with the paragraph explaining how many shares a matched buy and sell create. Read volume accounting through the explanation of cumulative volume, stopping before Section 12.1, “The volume trend table.” Focus on Table 3.1’s difference between a trade’s quantity and the running daily total. Later sections make trading interpretations from volume; for now, concentrate on reading what the number measures.
A tall volume bar says more shares traded in that interval than in a shorter bar on the same scale. It does not reveal that all those shares were “bought rather than sold”: every completed trade has both sides. The bar’s color may follow a price-color convention, but its height is the volume measurement.
Putting a chart header and its bars together
This historical chart is for a US-listed stock, not an Indian trading example. It is useful here because its header prints OHLCV while the lower panel shows volume bars.
The header for 24 June 2013 reads Open 95.37, High 96.70, Low 94.60, Close 95.90, Volume 2.7M. Here, 2.7M means about 2.7 million shares for that daily interval, not a price and not shares waiting in the order book. The close is above the open, even though the header also shows a negative change. Those statements compare different things: close versus that day’s open and close versus the previous day’s close. The chart’s colorized styling is another reason to check its numbers rather than infer OHLC from red or dark coloring alone.
When you inspect any chart, a dependable reading order is: identify the timeframe, locate the price candle and its OHLC values, then look directly below it for the volume bar covering the same interval. If an axis or label is unclear, avoid estimating a precise price or share count from bar height alone.
Key takeaways
Each chart interval has its own open, high, low, close, and traded volume. Candles and OHLC bars display all four prices; a closing-price line does not. Volume bars count shares traded during their intervals, whereas a quote may show a cumulative total for the day. Check the timeframe, scales, and platform color convention before interpreting a mark.
Next, you will use price and quantity together to calculate a hypothetical trade’s notional value and percentage return.