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Candlestick Charts

Candlestick charts are sometimes referred to as Japanese candlestick charts since 17th century Japanese traders were reported to use these types of charts to speculate on rice prices.  Candlesticks contain the same data as a normal bar chart but highlight the relationship between opening and closing prices. The narrow stick represents the range of prices traded during the period (high to low) while the broad mid-section represents the opening and closing prices for the period.

If the close is higher than the open, the candlestick body is said to be "hollow" or "open".  A higher price is typically represented with a light color.

If the open is higher than the close, the candlestick body is said to be "dark" or "closed".  A lower price is typically represented with a dark color.

candlestickchart

The chart above points out some of the basic features of the candlestick charts.

The "wick" portion of the chart is the high and low information.  If there is a wick at the bottom, this would be the lowest price of the bar.  On the contrary, a wick at the top most portion of the candlestick represents the high point of the day.  If the candlestick is open and has no top wick, the bar ended on the highest price.  If the candlestick is closed and has no bottom wick, the bar ended on the lowest price.

See Also

Candlestick Chart Patterns

Line Charts

Bar Charts