What is OHLC?
In short
The four prices behind every candle: Open, High, Low and Close.
OHLC is the four prices behind every candle or bar: Open (the first traded price of the period), High (the highest price), Low (the lowest price) and Close (the last price of the period). Price data on any timeframe is stored as exactly these four numbers, usually alongside volume.
Where it's used
- Charts. Candlestick and OHLC-bar charts plot these four prices.
- Indicators. Many indicators are built from OHLC: ATR from High, Low and the previous Close; RSI and most moving averages typically from Close; VWAP from the "typical price" = (High + Low + Close) ÷ 3.
- Combining timeframes. A larger bar is built from smaller ones: Open is the first bar's open, High is the highest high, Low is the lowest low, Close is the last bar's close.
What to watch
- Close is often considered the most important price: it shows where the market settled at the end of the period.
- A daily Open and Close can differ depending on whether only the regular session or extended hours (pre-market) are included — check your source.
- Historical data may or may not be adjusted for splits and dividends; use the same kind consistently in your calculations.
Green candle: close above open. Red: below. Wicks show how far price went and came back.
Left: the seven hourly candles of one trading day — a sell-off from $100 to $97, then a recovery to $101. Right: the same day as one daily candle: O $100, H $101.30, L $97, C $101. The whole intraday fight became one long lower wick.
Example
Illustrative: building one hourly bar from four 15-minute bars.
- Bar 1: O $100, H $101, L $99.50, C $100.80
- Bar 2: O $100.80, H $102.20, L $100.50, C $101.90
- Bar 3: O $101.90, H $102, L $100.90, C $101.20
- Bar 4: O $101.20, H $101.60, L $100.70, C $101.40
Hourly bar: Open $100 (from bar 1), High $102.20 (highest), Low $99.50 (lowest), Close $101.40 (from bar 4). Range: $102.20 − $99.50 = $2.70. Typical price: ($102.20 + $99.50 + $101.40) ÷ 3 = $303.10 ÷ 3 ≈ $101.03.
Mistakes and tips
If daily candles differ across sources, check how the regular session and extended hours are handled.
Use split- and dividend-adjusted data for backtests, or you'll see fake 'gaps'.
When planning stops and entries, look at High and Low, not just Close — a stop triggers on prices within the period.
Frequently asked questions
- What's the difference between OHLC and a candlestick chart?
- The data is the same four prices. Only the look differs: a candle fills in the body, while an OHLC bar marks the open and close with small ticks on the left and right.
- Why is the closing price important?
- It's the price buyers and sellers settled on at the end of the period. Many indicators and signals are calculated from the close.
Learn it in the Academy
This term is covered with hands-on examples and a quiz in these lessons of the interactive course.
Try the theory without risk
Open a free account: demo trading with a $10,000 virtual balance, a trading journal, calculators and a step-by-step course.