Candlestick chart

Scheme of a single candlestick chart. A candlestick as this one is usually shaded red as the close is lower than the open. The Low and High caps are usually not present but may be added to ease reading.
An hourly candlestick shown with order book depth on a currency exchange.

A candlestick chart (also called Japanese candlestick chart or K-line) is a style of financial chart used to describe price movements of a security, derivative, or currency.

While similar in appearance to a bar chart, each candlestick represents four important pieces of information for that day: open and close in the thick body, and high and low in the "candle wick". Being densely packed with information, it tends to represent trading patterns over short periods of time, often a few days or a few trading sessions.[citation needed]

Candlestick chart of EUR/USD currency pair on daily timeframe in MetaTrader 5 trading platform.

Candlestick charts are most often used in technical analysis of equity and currency price patterns. They are used by traders to determine possible price movement based on past patterns, and who use the opening price, closing price, high and low of that time period.[citation needed] They are visually similar to box plots, though box plots show different information.[1]

  1. ^ Patel, Ravi (1 January 2010). Guide To Technical Analysis & Candlesticks. Buzzingstock Publishing House. ASIN B00GZMSEDM.