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Candlestick chart

AnalyticsTrade Team
AnalyticsTrade Team Last updated on 26 Apr 2023

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Candlestick Chart

A candlestick chart is a type of financial chart used to describe price movements of a security, derivative, or currency. It is a combination of a line-chart and a bar-chart, in that each bar represents the range of price movement over a given time interval. The body of the candlestick displays the opening and closing prices, while the wicks of the candlestick show the high and low prices. Candlestick charts are used by traders to determine potential price direction.

History of Candlestick Charts

Candlestick charts were first developed in Japan in the 18th century by Munehisa Homma, a rice trader from Sakata. He used the charts to analyze the price of rice contracts and to make profitable trades. The candlestick charting technique was later introduced to the West by Steve Nison in his book, โ€œJapanese Candlestick Charting Techniques.โ€ Since then, candlestick charts have become a popular tool for technical analysis in the financial markets.

Comparison Table

Chart Type Price Movement Body Wicks
Candlestick Range Opening and Closing Prices High and Low Prices
Line Closing Price N/A N/A
Bar Range Opening and Closing Prices High and Low Prices

Summary

Candlestick charts are a popular tool for technical analysis in the financial markets. They are a combination of a line-chart and a bar-chart, in that each bar represents the range of price movement over a given time interval. The body of the candlestick displays the opening and closing prices, while the wicks of the candlestick show the high and low prices. For more information about candlestick charts, you can visit Investopedia, TradingView, and StockCharts.

See Also

  • Technical Analysis
  • Price Action
  • Support and Resistance
  • Moving Averages
  • Bollinger Bands
  • Relative Strength Index (RSI)
  • Stochastic Oscillator
  • MACD
  • Fibonacci Retracement
  • Ichimoku Cloud

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