Financial Glossary Header Image

Candlestick Charts

Updated on March 15, 2023

Candlestick charts are a type of financial chart that is used to display the price movement of a security, such as a stock, commodity, or currency, over a specific period of time. They are used to visualize the open, high, low, and close prices for each period, and are commonly used in technical analysis to identify patterns and trends that can provide insight into future price movements.

What are the key details in a candlestick?

Each candle on the chart represents a specific period of time, such as a day, week, or month, and is represented by a “candlestick.” The candle’s body represents the range between the opening and closing prices, with the top of the body representing the opening price and the bottom representing the closing price. The “wicks” or “shadows” above and below the body represent the high and low prices for the period.

What are bullish and bearish candlesticks?

If the closing price is higher than the opening price, the cand’s body is typically colored white or green, indicating a bullish sentiment. If the closing price is lower than the opening price, the candle’s body is typically colored black or red, indicating a bearish sentiment.

Candlestick charts can be used in combination with other forms of technical analysis, such as trend lines, moving averages, and indicators, to identify patterns and trends, which can be used to generate trading signals. They are widely used in the financial markets, including stock, forex, and cryptocurrency markets.