The previous article’s quote panel was one day’s data in table form. The market app’s main screen draws the same data as two charts: the intraday chart (today, magnified) and the candlestick chart (many days lined up together). This article explains those two charts plus the colored curves draped over the candlesticks (moving averages).
One candlestick = four prices
Take the stock from the last article: open 37.50, close 38.00, high 38.25, low 37.50. Drawn as a candlestick:
- The close (38.00) is above the open (37.50) → the day rose, so draw a bullish candle (red by default in Chinese software — remember, red means up in China).
- Draw a rectangle from the open to the close, called the body: 37.50 to 38.00.
- The high pokes above the body’s top edge; draw a thin line from the top of the body up to 38.25 — the upper shadow.
- The low equals the open, so nothing extends below the body — no lower shadow.
A bearish candle (close below open, green by default) is drawn completely symmetrically. One candlestick compresses the four prices “open, close, high, low” into a single graphic. A one-day candle is a daily candle; there are also weekly candles (one per week) and 60-minute candles (one per hour) — same drawing method, different statistical window.
The intuition for reading candlesticks is a single sentence: the body tells you who won (buyers or sellers); the shadows tell you how rough the journey was. A long upper shadow = the price surged intraday and got beaten back, so there’s selling pressure overhead; a long lower shadow = the price dived and got caught, so there’s support below. Last article’s “no lower shadow, short upper shadow, closed near the high” bullish candle translates into candlestick language as: buyers won from open to close and met almost no resistance.
The intraday chart: today, magnified
The intraday chart （分时图） is the “within-the-day” version of the price chart. Its horizontal axis is the 9:30–15:00 trading session (with the 11:30–13:00 lunch break in the middle), and it usually has two lines:
- The price line: every trade connected into a time series — the intraday trajectory a candlestick can’t show.
- The average-price line (usually a different color): the volume-weighted average price from the open to the current moment — the real-time rolling version of last article’s “turnover value ÷ volume.”
The average-price line is the most valuable thing on the intraday chart: when the price runs above it, today’s later buyers are paying ever-higher costs, holders as a whole are sitting on floating profits, and sentiment is strong; below it, the reverse. When trading-desk slang says “broke above the average line” or “fell below the average line,” this is the line they mean.
The volume bars below are tallied by the minute; what you’re watching is when the volume spikes: the first and last half-hours are usually the heaviest of the day (the former digests overnight news; the latter is when institutions rebalance and retail investors “finally make a decision after watching all day”).
Moving averages: the sliding average of the last N closes
The colored curves draped over the candlestick chart are moving averages (MA). Take MA20: on each trading day, take the closing prices of the most recent 20 trading days including today, compute the arithmetic mean, and connect those means into a line. MA5, MA10, MA20, and MA60 just swap the 20 for 5, 10, and 60.
Reading moving averages by period:
- MA5 / MA10: short-term sentiment; price hugging the MA5 is the signature of a strong one-way trend;
- MA20: the “monthly line” (about 20 trading days), short-term traders’ most-used bull/bear dividing line — “hold above the line, stand aside below it” is the entry-level rule of many systems;
- MA60: the “quarterly line,” the watershed of the medium-term trend;
- MA120 / MA250: the half-year and yearly lines, the long-term trend; the 250-day is often called the “bull/bear dividing line.”
Golden cross and death cross: a short-term average crossing up through a long-term one is a golden cross (e.g., MA5 crossing above MA20), traditionally read as a buy signal; crossing down is a death cross, read as a sell signal. A “bullish alignment” (short-term on top, long-term on the bottom, all fanning upward) is seen as a healthy trend pattern; a bearish alignment is the reverse.
The cold water that must be poured: moving averages are rearview mirrors
Every moving-average signal is computed from prices that have already happened, so it’s inherently lagging: by the time a golden cross appears, the rise has usually been underway for a while; by the time a death cross appears, the fall has already occurred. In a choppy, range-bound market, price crosses back and forth through the averages, and golden/death crosses get “slapped in the face” repeatedly (this is called “moving-average entanglement,” and it’s the losing season for trend strategies).
So the correct framing is: moving averages describe trends; they don’t predict them. They answer “what state are we in now,” not “what happens tomorrow.” When the quant series does backtesting later, you’ll see it with your own eyes: a pure golden-cross/death-cross strategy, net of fees, doesn’t make money in A-shares over the long run — but as a filter (“only go long above the MA20”) it genuinely works. A textbook case of “the concept is useful, the dogma is harmful.”
The volume bars: the lower half of the candlestick screen
The row of red and green bars under the candlestick chart shows each candle’s trading volume (red bars for bullish candles, green for bearish). Price-volume relationships boil down to four basic mnemonics:
- Price up, volume up: the rise has capital confirmation — healthy;
- Price up, volume down: the rise lacks follow-through — sustainability in doubt;
- Price down, volume up: panic or distribution — dangerous;
- Price down, volume down: selling pressure exhausted — possibly near a local bottom.
Mnemonics are probabilities, not laws — a rise on shrinking volume can actually be a sign of strength in a stock whose shares are tightly locked up by holders. There are many schools of price-volume analysis; for beginners, mastering these four rules and knowing exceptions exist is enough.
Next article, a change of perspective: not history, but “right now” — the buy and sell orders sitting on the order book, and what exactly happens in those ten minutes of call auction from 9:15 to 9:25 every day.
This article explains terminology only and does not constitute investment advice.