Candlestick

AAA

DEFINITION of 'Candlestick'

A chart that displays the high, low, opening and closing prices for a security for a single day. The wide part of the candlestick is called the "real body" and tells investors whether the closing price was higher or lower than the opening price (black/red if the stock closed lower, white/green if the stock closed higher). The candlestick's shadows show the day's high and lows and how they compare to the open and close. A candlestick's shape varies based on the relationship between the day's high, low, opening and closing prices.

Candlestick

INVESTOPEDIA EXPLAINS 'Candlestick'

Candlesticks reflect the impact of investors' emotions on security prices and are used by technical analysts to determine when to enter and exit trades. Candlestick charting is based on a technique developed in Japan in the 1700s for tracking the price of rice. There are many short-term trading strategies based upon candlestick patterns, such as the engulfing pattern, harami, harami cross and evening star.

VIDEO

RELATED TERMS
  1. Stick Sandwich

    A technical trading pattern in which three candlesticks form ...
  2. Chart Formation

    A graphical depiction of a stock's price movements over time. ...
  3. Equivolume

    A chart that compares price and volume and plots them together ...
  4. Sanku (Three Gaps) Pattern

    The Japanese word for a candlestick pattern that consists of ...
  5. Kicker Pattern

    A two-bar candlestick pattern that is used to predict a change ...
  6. Bearish Harami

    A trend indicated by a large candlestick followed by a much smaller ...
Related Articles
  1. What are the differences between a bar ...
    Charts & Patterns

    What are the differences between a bar ...

  2. Tales From The Trenches: Location Is ...
    Active Trading

    Tales From The Trenches: Location Is ...

  3. Advantages Of Data-Based Intraday Charts
    Charts & Patterns

    Advantages Of Data-Based Intraday Charts

  4. Western Line Vs. Candlestick Charting ...
    Charts & Patterns

    Western Line Vs. Candlestick Charting ...

Hot Definitions
  1. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  2. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  3. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  4. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  5. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
  6. Call Risk

    The risk, faced by a holder of a callable bond, that a bond issuer will take advantage of the callable bond feature and redeem ...
Trading Center