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Definition: candlestick


A chart that depicts the price action of a commodity over time, which can be hours, days or weeks. Candlesticks are used to show price trends for securities and cryptocurrencies. A different charting style than the traditional bar chart, candlesticks were developed for Japanese rice trading in the 18th century. Also called "candies."

Open, Close, High and Low
A candlestick shows four price points for the time period specified. Experienced traders claim they can spot trends because the "candies" show the emotional sentiment for the period.




Green or Solid Is Good
When the body of a candlestick is green, black or some other solid color, it means the closing price was higher than the open. When red or devoid of color, the close was lower.





Single Indicators
For shorter time frames, one-candle signals are used. Upper and lower shadows show bearish and bullish trends. A hammer shows major buying, whereas a hanging man may indicate the opposite. The Doji candle means that the open and close were the same.