What is a candlestick chart?
- by Anna K.
Candelstick chart is one of the most popular and common trading charts in the markets now. Although it has some disadvantages it is still one of the most convenient ways for chart drawing in the market.
In the chart one can see a lot of candle-like sticks and everyone pretty much understands the whole movement of the graphic, but the amateurs usually don’t know that the candle itself can have a lot of meaning inside.
There four pieces of information hidden inside that little candle on the graphic: opening and closing prices as well as high and low of the stock or asset for the day. Little vertical strokes on the top and the bottom of the candle represent the difference between high and low of the asset during the trading day. These strokes are called the wicks.
Candle can also be in the company of additional information: a total number of the traded shares, or the total amount of contracts open for the trade.
Reading candlestick graphic is not a difficult task. It takes just a few days of practice to be of full understanding of the charts.