What is a candlestick chart?

A candlestick chart is a type of financial chart that shows the price action for an investment market like a currency or a security. The chart consists of individual “candlesticks” that show the opening, closing, high, and low prices each day for the market they represent over a period of time, forming a pattern.

Do candlestick charts indicate market turning points?

Provide earlier indications of market turning points: candlestick charts can send out reversal signals in a few sessions, rather than the weeks often needed for a bar chart reversal signal. Thus, market turns with candlestick charts will frequently be in advance of traditional indicators.

How do you know if a candlestick is high or low?

Look at the upper line to see the highest price for the market. If there is no upper shadow, then the highest price is the same as the opening or closing price, depending on whether the market is trending up or down. Examine the lower shadow of the candlestick to determine the low price.

What is the broadest part of a candlestick line?

The broadest part of the candlestick line is the real body. It represents the range between the session’s open and close. If the close is lower than the open the real body is black. The real body is white if the close is higher than the open. The real body is white if the close is higher than the open.