Candlestick Charts

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Introduction to Candlestick Charts

Candlestick charts are a type of financial chart used to describe price movements of securities, derivatives, and currencies. Each candlestick provides a visual representation of price movements for a specific period. This type of chart is highly favored in technical analysis for its ability to convey a large amount of information in a concise and easily interpretable format.

Structure of a Candlestick

A single candlestick consists of the following components:

1. Body:

• Open Price: The price at which the asset started trading during the period.

• Close Price: The price at which the asset ended trading during the period.

• Color: Typically, a green (or white) body indicates a closing price higher than the opening price (bullish), and a red (or black) body indicates a closing price lower than the opening price (bearish).

2. Wicks (or Shadows):

• Upper Wick (or Shadow): The highest price during the period.

• Lower Wick (or Shadow): The lowest price during the period.

Structure of a Candlestick

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