Candlestick
ChartingQuick Definition
A type of price chart that displays the high, low, open, and closing prices of a security.
Detailed Explanation
Candlestick charts originated in Japan and are now one of the most popular ways to visualize price movements. Each candlestick represents a specific time period and shows four price points: open, high, low, and close. The body of the candle shows the opening and closing prices, while the wicks (or shadows) show the high and low. Green or white candles typically indicate the close was higher than the open (bullish), while red or black candles show the close was lower than the open (bearish). Candlestick patterns can provide valuable insights into market sentiment and potential reversals.
Real Trading Example
A long green candlestick with small wicks indicates strong buying pressure throughout the trading period, with prices closing near the highs.