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A chart showing price movement where each "candle" displays open, high, low, and close prices.
Why It Matters
Candlestick charts pack four data points into one visual - open, high, low, and close. Green (or white) candles show price went up; red (or black) candles show it went down. The 'wicks' show the high and low. Patterns like 'doji' or 'hammer' can signal reversals. Most trading platforms default to candlesticks because they show more information than simple line charts.
Key Points
- Body shows open-to-close range; wicks show high and low of the period
- Common patterns: Doji (indecision), Hammer (potential reversal), Engulfing (trend change)
- Candlesticks originated in 18th century Japan for trading rice futures
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How to Read Stock Charts
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Common Questions
A chart showing price movement where each "candle" displays open, high, low, and close prices. Candlestick charts pack four data points into one visual - open, high, low, and close. Green (or white) candles show price went up; red (or black) candles show it went down.
Candlestick charts pack four data points into one visual - open, high, low, and close. Green (or white) candles show price went up; red (or black) candles show it went down. The 'wicks' show the high and low. Patterns like 'doji' or 'hammer' can signal reversals. Most trading platforms default to candlesticks because they show more information than simple line charts.
Body shows open-to-close range; wicks show high and low of the period
Common patterns: Doji (indecision), Hammer (potential reversal), Engulfing (trend change)
Candlesticks originated in 18th century Japan for trading rice futures