Candlestick
A charting style that displays the high, low, open, and close prices of an asset for a specific period.
Plain-English Meaning
A candlestick is a visual summary of price action during a specific timeframe, like one hour or one day. The "body" shows the opening and closing prices, while the "wicks" (or tails) show the highest and lowest points reached.
Why It Matters
Candlesticks provide a quick read on market sentiment. A long green body shows strong buying pressure, while a long wick at the top suggests sellers pushed the price down from its peak.
Simple Example
A daily candlestick that opens at $100, drops to $90, but closes near its high at $110 tells a story: sellers pushed the price down early, but strong buyers ultimately took control.
This educational example uses selected assumptions for reference calculation purposes. Real conditions may vary by broker, exchange, or instrument.
Beginner Mistake
Memorizing complex candlestick pattern names instead of understanding the story they tell about buyer and seller behavior. Focus on the size of the body and the length of the wicks.
Note: Candlestick patterns are visual references and can produce false or unclear signals, especially in choppy markets.