Candlestick

Candlestick charts are a popular tool in technical analysis for tracking the price movements of securities, such as stocks, currencies, or commodities. Each candlestick represents price data for a specific time period (e.g., one day, one hour). Here's a breakdown of candlestick formation and its components:

Components of a Candlestick:

1. Body:

• Open: The price at which the security started trading during the time period.

• Close: The price at which the security ended trading during the time period.

• The body is filled or colored to indicate whether the closing price was higher or lower than the opening price:

• Bullish: If the closing price is higher than the opening price, the body is often filled with a light color (like white or green) or empty (depending on the charting platform).

• Bearish: If the closing price is lower than the opening price, the body is filled with a dark color (like black or red).

2. Wicks (or Shadows):

• Upper Wick: The line extending from the top of the body to the highest price reached during the time period.

• Lower Wick: The line extending from the bottom of the body to the lowest price reached during the time period.

3. Open and Close Prices:

• The top and bottom of the body represent the open and close prices.

• The wicks show the highest and lowest prices during the period.