Candlestick

Candlestick charts are used by traders to describe price movements of any asset or security, including stocks, currencies, etc.

Candlesticks can be broken down into any interval, including minute-long periods, or most commonly one day.

This form of analysis is similar to a bar chart in that each candlestick represents all four important pieces of information for that day.

This includes open and close in the thick body, as well as a high and low in the candle wick.

These visualized tools are instrumental for financial and technical analysis and are helpful in determining possible prices.

Different Types of Candlesticks

There are several types of candlesticks that traders need to know about, i.e., bearish, bullish, and neutral.

Bearish candlesticks are colored red and can indicate a drop in price. There are several kinds of bearish candlesticks.

Those without wicks or lines that extend from either end are considered to be a strong bearish sign.

Those with a long wick hanging under a short body could be possibly bearish and those with a long wick extending upward from a short body are also considered to be possibly bearish.

By extension, bullish candlesticks are colored green and can indicate a rise in price. A full green body with no wicks is a strong bullish sign.

A long wick hanging from a short body can indicate a possible bull market while a long wick extending upward can also indicate a possible bull market.

Neutral candlesticks can be red or green and do not indicate much about the current market sentiment. They are short bodies with roughly equal-sized wicks extending from both ends.