OHLC Terms Explained: Key Differences Between Open/Close & High/Low for Day Traders

A post in r/Daytrading [1] asks for clarity on OHLC terms for day trading. Comments highlight key distinctions:

• Open/Close
  : Time-based (first/last price of a period) vs
  High/Low
  : Price-based (extreme values, rarely at open/close) (Skeewampus).
• Psychological insights: A candle with open $1.00, high $2.20, close $0.80 signals strong bearish sentiment via its long top wick (Bekqifyre).
• Candlestick formation: Open/close determine color (bullish if close > open), high/low form wicks (Father_Flanigan).

Analytical data confirms OHLC is foundational for technical analysis [2][3]:

• OHLC data (resampled from tick data) forms candlesticks across timeframes (1min to weekly).
• Patterns like Doji (indecision) or Engulfing (momentum shift) rely on open/close relationships and wick lengths.
• Multi-timeframe alignment increases signal reliability (e.g., 15min Hammer + daily bullish Engulfing).

Reddit’s practical examples align with research’s structured framework: Both emphasize OHLC’s role in decoding trader sentiment (fear/greed via wicks) and timeframe dynamics. Reddit adds beginner-friendly context, while research deepens pattern significance.

• Risks
  : Misinterpreting single-timeframe OHLC (e.g., ignoring weekly trends for 1min signals) [5].
• Opportunities
  : Leverage multi-timeframe analysis to validate entry/exit points (e.g., using daily high/low as support/resistance for intraday trades) [4].