Basic Knowledge of Candlesticks

Basic Knowledge of Candlesticks

A candlestick on a technical chart is a representation of price movement during a time frame. The time frame may be from 1 minute to 1 month or maybe any timeframe.

In general, a candlestick consists of three parts- real body, upper shadow, and a lower shadow. The upper shadow is also known as an upper wick and the lower shadow is also known as a lower wick. In the below picture these three parts can be easily seen and remembered.

The real body shows the price range between the open and close during that time frame. The top of the upper shadow denotes the highest price and the bottom of the lower shadow denotes the lowest price during that period.

The bullish (positive) candle is shown with the green color or unfilled(hollow/white) body. While the Bearish(negative) candle is shown with the red color or black(filled) body.

If the closed price is higher than the opened price then the color of the candle's body is represented with a green or unfilled(white) body. But if the closed price is lower than the opened price then the color of the candle's body is represented with a red or black(filled) body.

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Different Types of Candlesticks