Formation of candlestick<\/span><\/h2>\nCandlesticks are graphical representations of price movement for a given period of time. They are commonly formed by the opening, high, low, and closing prices of stock (when investing in stocks – when investing in bonds, forex and commodity they are formed by the appropriate values).<\/p>\n
If the opening price is above the closing price then a filled (normally red or black) candlestick is drawn.<\/p>\n
If the closing price is above the opening price, then normally a green or a hollow candlestick (white with black border) is shown.
\nThe filled or hollow portion of the candle is? known as body or\u00a0real body<\/em>, and can be long, normal, or short depending on its proportion to the line above or below it.<\/p>\nThe lines above and below, known as\u00a0shadows<\/em>,\u00a0tails<\/em>, or\u00a0wicks<\/em> represent the high and low price ranges within the specified time period. However, not all candlesticks have shadows.<\/p>\nSee how investing in stocks can improve using candlesticks:<\/p>\n
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\n\n\n\n\n\n\n\n\n\n\n| <\/td>\n<\/tr>\n | \n![\"Candlesticks](\"http:\/\/stockmarket.what-todo.com\/stockmarket\/wp-content\/uploads\/2012\/01\/a1.jpg\" "\\"Investing") <\/a>Has an unusually long black body with a wide range between high and low. Prices open near the high and close near the low. Considered a\u00a0bearish\u00a0pattern.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n <\/p>\n ![\"Candlesticks](\"http:\/\/stockmarket.what-todo.com\/stockmarket\/wp-content\/uploads\/2012\/01\/a2.jpg\" "\\"a2") <\/a><\/p>\n
\n\n\n| <\/td>\n<\/tr>\n | \n| Has an unusually long white body with a wide range between high and low of the day. Prices open near the low and close near the high. Considered a\u00a0bullish pattern.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n ![\"Candlesticks](\"http:\/\/stockmarket.what-todo.com\/stockmarket\/wp-content\/uploads\/2012\/01\/a3.jpg\" "\\"a3\\"") <\/a><\/p>\n
\n\n\n| <\/td>\n<\/tr>\n | \n| Formed when the opening price is higher than the closing price. Considered to be a bearish signal.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n ![\"investing](\"http:\/\/stockmarket.what-todo.com\/stockmarket\/wp-content\/uploads\/2012\/01\/a4.jpg\" "\\"a4\\"") <\/a><\/p>\n
\n\n\n| <\/td>\n<\/tr>\n | \n| Formed when opening and closing prices are virtually the same. The length of shadows can vary.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n ![\"Candlesticks](\"http:\/\/stockmarket.what-todo.com\/stockmarket\/wp-content\/uploads\/2012\/01\/a5.jpg\" "\\"a5\\"") <\/a><\/p>\n
\n\n\n| <\/td>\n<\/tr>\n | \n| Formed when the opening and the closing prices are at the highest of the day. If it has a longer lower shadow it signals more\u00a0bullish\u00a0trend. When appearing at market bottoms it is considered to be a reversal signal.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n ![\"Candlesticks](\"http:\/\/stockmarket.what-todo.com\/stockmarket\/wp-content\/uploads\/2012\/01\/a6.jpg\" "\\"a6\\"") <\/a><\/p>\n
\n\n\n| <\/td>\n<\/tr>\n | \n| Formed when the opening and closing prices are at the lowest of the day. If it has a longer upper shadow it signals a bearish\u00a0trend. When it appears at market top it is considered a reversal signal.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n ![\"Candlesticks](\"http:\/\/stockmarket.what-todo.com\/stockmarket\/wp-content\/uploads\/2012\/01\/a7.jpg\" "\\"a7") <\/a><\/p>\n
\n\n\n| <\/td>\n<\/tr>\n | \n| Consists of a Doji with very long upper and lower shadow. Indicates strong forces balanced in opposition.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n ![\"\"](\"http:\/\/stockmarket.what-todo.com\/stockmarket\/wp-content\/uploads\/2012\/01\/a8.jpg\" "\\"a8\\"") <\/a><\/p>\n
\n\n\n| <\/td>\n<\/tr>\n | \n| A black or a white candlestick that consists of a small body near the high with a little or no upper shadow and a long lower tail. The lower tail should be two or three times the height of the body. Considered a bearish pattern during an uptrend.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n ![\"Candlesticks](\"http:\/\/stockmarket.what-todo.com\/stockmarket\/wp-content\/uploads\/2012\/01\/a8.1.jpg\" "\\"a8.1\\"") <\/a>
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\n\n\n| <\/td>\n<\/tr>\n | \n| A black or a white candlestick that consists of a small body near the high with a little or no upper shadow and a long lower tail. Considered a bullish pattern during a downtrend.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
\n<\/a>![\"Candlesticks](\"http:\/\/stockmarket.what-todo.com\/stockmarket\/wp-content\/uploads\/2012\/01\/a9.jpg\" "\\"a9") <\/a>
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\n\n\n| <\/td>\n<\/tr>\n | \n| A black body in an upside-down hammer position. Usually considered a bottom reversal signal.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/td>\n | \n\n\n\n![\"Candlesticks](\"http:\/\/stockmarket.what-todo.com\/stockmarket\/wp-content\/uploads\/2012\/01\/a10.jpg\" "\\"a10") <\/a><\/p>\n\n\n\n| <\/td>\n<\/tr>\n | \n| It consists of black or a white candlestick in an upside-down hammer position.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n ![\"Candlesticks](\"http:\/\/stockmarket.what-todo.com\/stockmarket\/wp-content\/uploads\/2012\/01\/a11.jpg\" "\\"a11\\"") <\/a><\/p>\n
\n\n\n| <\/td>\n<\/tr>\n | \n| A black or a white candlestick is formed with a lower tail that has a length of 2\/3 or more of the total range of the candlestick. Normally considered a bullish signal when it appears around price support levels.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n ![\"Candlesticks](\"http:\/\/stockmarket.what-todo.com\/stockmarket\/wp-content\/uploads\/2012\/01\/a12.jpg\" "\\"a12\\"") <\/a><\/p>\n
\n\n\n| <\/td>\n<\/tr>\n | \n| A black or a white candlestick with a upper shadow that has a length of 2\/3 or more of the total range of the candlestick. Normally considered a bearish signal when it appears around price resistance levels.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n ![\"investing](\"http:\/\/stockmarket.what-todo.com\/stockmarket\/wp-content\/uploads\/2012\/01\/a13.jpg\" "\\"a13\\"") <\/a><\/p>\n
\n\n\n| <\/td>\n<\/tr>\n | \n| A long or a normal candlestick (black or white) with no shadow or tail. The high and the lows represent the opening and the closing prices. Considered a continuation pattern.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n ![\"Candlesticks](\"http:\/\/stockmarket.what-todo.com\/stockmarket\/wp-content\/uploads\/2012\/01\/a14.jpg\" "\\"a14\\"") <\/a><\/p>\n
\n\n\n| <\/td>\n<\/tr>\n | \n| A black or a white candlestick that has a small body, a long upper shadow and a little or no lower tail. Considered a bearish pattern in an uptrend.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n ![\"investing](\"http:\/\/stockmarket.what-todo.com\/stockmarket\/wp-content\/uploads\/2012\/01\/a15.jpg\" "\\"a15\\"") <\/a><\/p>\n
\n\n\n| <\/td>\n<\/tr>\n | \n| A black or a white candlestick with a small body. The size of shadows can vary. Interpreted as a neutral pattern but gains importance when it is part of other formations.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n ![\"Candlesticks](\"http:\/\/stockmarket.what-todo.com\/stockmarket\/wp-content\/uploads\/2012\/01\/a16.jpg\" "\\"a16investing") <\/a><\/p>\n
\n\n\n| <\/td>\n<\/tr>\n | \n| Formed when the closing price is higher than the opening price and considered a bullish signal.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n ![\"\"](\"http:\/\/stockmarket.what-todo.com\/stockmarket\/wp-content\/uploads\/2012\/01\/17.jpg\" "\\"17\\"") <\/a><\/p>\n
\n\n\n| <\/td>\n<\/tr>\n | \n| A black or a white candlestick with no lower tail.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n ![\"\"](\"http:\/\/stockmarket.what-todo.com\/stockmarket\/wp-content\/uploads\/2012\/01\/a18.jpg\" "\\"a18\\"") <\/a><\/p>\n
\n\n\n| <\/td>\n<\/tr>\n | \n| A black or a white candlestick with no upper<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n | | | | | | | | | | | | | | | | | | | | | |