Candlestick chart
Also known as: candlestick
A candlestick chart is a way of displaying a 's price history where each period is shown as a candlestick, made up of a rectangular body and thin lines called wicks or shadows extending above and below it. The body covers the range between the opening and closing prices, typically shown in one color when the close is above the open and another color when the close is below it, while the wicks mark the highest and lowest prices reached during the period.
The format originated in Japanese rice trading centuries before it was adopted by Western markets, and it packs the same open, high, low, and close data as a traditional into a shape that is faster to read visually. A long body signals a strong, decisive move in one direction over that period, while a short body with long wicks signals indecision, since price traveled a wide range but ended up close to where it started.
Because the shapes are easy to scan across many periods at once, candlestick charts are the basis for a large family of recognized patterns, single candles like a or a hammer, and formations built from several candles like an or a , that traders use to read shifts in momentum and sentiment. Candlestick charts have become the default chart type on most trading platforms, largely replacing plain and for day to day price analysis.