Eric says there are three types of candles you will find on any chart: an expansion candle, a reversal candle and an indecision candle. He calls this how he profiles his candles, and the lecture walks through what each one is, how to identify it, and how it looks on the lower time frame.

An expansion candle has a small wick and a large body. It opens, creates a low and then expands in one direction very swiftly. Eric calls it the most ideal and straightforward candle type because it moves the fastest; on the hourly chart price opens, forms its low and immediately starts expanding higher.

A reversal candle is the inverse of an expansion candle: it has a large wick and a small body, representing price reversing swiftly from a level. Inside its range there is a sharp reversal, such as a swift move lower followed by a swift move higher, and once that wick prints, bearish ideas for that candle are invalidated.

An indecision candle has large wicks on both sides and a small body, like a reversal candle without a direction. Price opens, goes lower, goes higher and returns to the open, showing a lack of direction. Eric says the candle is an invalidation itself, so you are better off waiting for a new candle to open.

A candle has two parts. The body is the distance from the open to the close: if price closes above the open it is bullish (green, white on Eric's chart), below it is bearish (red, black). The wick represents the highest and lowest points price reached during the life of the candle.

Price is limited in range and can only do so much in a single candle. The less time a candle spends forming its wick, the more time it has to form the body. Candles with both a large wick and a large body are unrealistic, typically only appearing in news events as a spike within seconds.

Yes. The swift move away from the open inside a reversal candle is still an expansion, so you can trade it, but only back to where the candle opened. Because price spent most of its time going the other way, it lacks time to go further, so do not target beyond the open; wait for a new candle.

The September 1 candle opened at 1800 and formed its low seven hours later, leaving 16 of 23 hours to expand higher. The reversal candle took 15 hours of the 23-hour candle to form its low, leaving only nine hours, so price could only move back to around the open.

Pick any chart on the daily time frame and label the last 20 candles as expansion, reversal or indecision, noting whether wick or body is bigger. Compare the three largest bodies and three largest wicks, drop one expansion and one indecision candle to the lower time frame, and count how many you could not confidently label.

On the Bitcoin daily chart, the bullish candle opened at 69,655, its lowest point that day was 68,885, the highest was 73,015 and it closed at 72,655. Eric says that means price moved a total of 4,140 dollars that day, which is how you read an open low high close chart.