Candlestick Chart

Candlestick charts are a type of chart used since the 19th century, they got developed by Japanese rice traders and have been in use ever since.

Each candlestick chart gets represented by a vertical rectangular candle, or “real body” and a pair of vertical lines, or “wicks”, one at the top and one at the bottom of the rectangle. Candles come in two colours, red and green (traditionally black and white).

For a candle to be green, it has to open and rise in price before it closes (i.e. its opening price is at the bottom of the rectangle, and its closing price is at the top of it). The opposite is true of red candles.

For a candle to be red, it has to open and fall in price before it closes (i.e. its opening price is at the top of the rectangle, and its closing price is at the bottom of it).

Each candle provides four critical pieces of information, the asset’s opening price, its closing price, the highest price is reached during the period, and the lowest price it reached during the period.