Candlestick chart
Candlestick chart

Candlestick chart

In this case, a candlestick is a type of price chart which displays the graphical representations of financial instruments like virtual currencies and stocks.

A candlestick chart consists of rectangles called real bodies and vertical lines projecting from the top and bottom of the real body. These are depicted as a candlestick with a wick and a tail. Candlestick charts are categorized into daily, weekly, and monthly charts based on daily, weekly and monthly data.

Candlestick charts display four values such as open prices, high prices, low prices and close prices of financial instruments for a specific period. Among these four values, the open and close prices are represented by bars.

On the chart, each candlestick includes an open, high, low and close price for a given time frame such as one day, one week, one month, etc. Open prices depict the first price traded at the time of formation of a new candle. Close prices depict the last price traded during the period of candle formation. When the opening price is higher than the closing price, the color of the candle changes. This is called a filled candlestick. Conversely, when the closing price is higher than the opening price, it is called a hollow candlestick.

The vertical lines on either ends of the candle depict the high price and the low price. The high price represents the highest trading price and the low price represents the lowest price traded. The line projecting above the real body is called the upper shadow (or wick) and shows the high prices. The line projecting below the real body is called the lower shadow (or tail) and shows the low prices.