Candlesticks are graphical representations of price movements in a specified time period on a trading chart. Each candlestick shows the opening, closing, highest, and lowest prices during that time. The “body” of the candlestick represents the range between the opening and closing prices, while the “wicks” or “shadows” show the high and low prices.
While candlesticks can be any color, typically a green or white candlestick indicates that the closing price was higher than the opening price, signaling bullish activity. Conversely, a red or black candlestick means the closing price was lower than the opening price, indicating bearish activity.
Candlestick charts are widely used in technical analysis to study price patterns and trends, helping traders make informed decisions.
Candlesticks are sometimes referred to as Japanese candlesticks as their origin is from 17th Century Japan. Japanese candles sticks are said to display the emotion of a market.
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