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DEFINITION of 'Red Candlestick'

The component of a candlestick chart that represents a downward movement in the underlying price. A red candlestick is composed of the period's high, low, opening and closing prices. If the closing price is lower than the day's opening price, then the body of the candle is red or black.

Also known as a "black candlestick" or a "closed candlestick".

Red Candlestick

BREAKING DOWN 'Red Candlestick'

Charts are primarily used in technical analysis. A red candle quickly conveys a downward movement as well as the range of the price for the day. The longer the candle, the greater the price movement.

Most charting software will allow you to change the colors of these candles. Even though red and black are common colors for this type of candlestick, any color can be used.

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