What is a candlestick chart?

Candlestick charts display the high, low, open, and closing prices of a security for a specific period. Candlesticks originated from Japanese rice merchants and traders to track market prices and daily momentum hundreds of years before becoming popularized in the United States. Candlesticks can be used by traders looking for chart patterns.

What is a candlestick & how does it work?

A candlestick's shape varies based on the relationship between the day's high, low, opening and closing prices. Candlesticks reflect the impact of investor sentiment on security prices and are used by technical analysts to determine when to enter and exit trades.

What is a shooting star candlestick & a Doji Candlestick?

Shooting Star candlestick is formed when a stock moves significantly higher than the opening price but rallies in the day to close below or near the opening price. It is an inverted Hammer. Doji candlesticks form when a stock's open and close are almost equal.

How do you visualize a candlestick?

You can visualize a candlestick as a vertical candle that is burning at both ends—every candlestick has a real body (the bulk of the “candle”) and an upper and lower “wick” or shadow. Each candlestick provides five pieces of information about the security in question during the day (or time period) in question: