A\u00a0candlestick chart<\/strong>\u00a0is a style of\u00a0bar-chart used primarily to describe price movements of a\u00a0security,\u00a0derivative, or\u00a0currency over time.<\/p>\n It is a combination of a line-chart and a bar-chart, in that each bar represents the range of price movement over a given time interval. It is most often used in\u00a0technical analysis of equity and currency price patterns. They appear superficially similar to\u00a0error bars, but are unrelated.<\/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 Candlesticks are usually composed of the body (black or white), and an upper and a lower shadow (wick): the area between the open and the close is called the\u00a0real body<\/em>, price excursions above and below the real body are called\u00a0shadows<\/em>. The wick illustrates the highest and lowest traded prices of a security during the time interval represented. The body illustrates the opening and closing trades. If the security closed higher than it opened, the body is white or unfilled, with the opening price at the bottom of the body and the closing price at the top. If the security closed lower than it opened, the body is black, with the opening price at the top and the closing price at the bottom. A candlestick need not have either a body or a wick.<\/p>\n To better highlight price movements, modern candlestick charts (especially those displayed digitally) often replace the black or white of the candlestick body with colors such as red (for a lower closing) and blue or green (for a higher closing).<\/p>\n <\/p>\n <\/p>\n Candlestick patterns<\/strong><\/p>\n In addition to the rather simple patterns depicted in the section above, there are more complex and difficult patterns which have been identified since the charting method’s inception. Complex patterns can be colored or highlighted for better visualization.<\/p>\n Candlestick charts also convey more information than other forms of charts, such as\u00a0Open-high-low-close charts. Just as with bar charts, they display the absolute values of the open, high, low, and closing price for a given period. But they also show how those prices are relative to the prior periods’ prices, so one can tell by looking at one bar if the price action is higher or lower than the prior one. They are also visually easier to look at, and can be coloured for even better definition. Rather than using the open-high-low-close for a given time period (for example, 5 minute, 1 hour, 1 day, 1 month), candlesticks can also be constructed using the open-high-low-close of a specified volume range (for example, 1,000; 100,000; 1 million shares per candlestick).<\/p>\n Use of candlestick charts<\/strong><\/p>\n Candlestick charts are a visual aid for decision making in\u00a0stock,\u00a0foreign exchange,\u00a0commodity, and\u00a0option trading. For example, when the bar is white and high relative to other time periods, it means buyers are very\u00a0bullish. The opposite is true for a black bar.<\/p>\n Heikin-Ashi (Japanese for ‘average bar’) candlesticks are a weighted version of candlesticks calculated with the following formula:<\/p>\n![\"Candlestick](\"http:\/\/stockmarket.what-todo.com\/stockmarket\/wp-content\/uploads\/2012\/01\/chart_candle1.jpg\" "\\"chart_candle1")
<\/a><\/p>\nCandlestick chart of EURUSD<\/h6>\n
Candlestick chart topics<\/span><\/h2>\n
<\/a>The basic candlestick<\/h6>\nHeikin Ashi candlesticks<\/span><\/h2>\n