What are candlesticks?

Stock market picks. Futures and Forex Trading System Candlesticks are perhaps the most widely used graph type in the stock market. They are relatively new to the western world although they have been used for 100s of years in Japan to measure the price of rice.

Each candlestick measures 1 day’s action for a given stock. Because of that there are two different types of candlesticks, Candlesticks that mark an up day and candlesticks that mark a down day.

bullish candlesticks

A bullish candlestick or is normally white, green, or lighter then the bearish candlestick. There are 4 points of interest with these candlesticks. The first is the bottom; the bottom of a candlestick is where the price was at when the day the market opened. The top of the candlestick is where the price was when the day closed.

The lines that come out of the candlestick also have meaning. A line that comes out of the top goes to the highest point the stock was trading at for the day. The line at the bottom goes to the lowest point the stock was trading at for the day.

Bearish candlesticks

A bearish candlestick is normally black, red, or darker then the bullish candlesticks. There are also 4 major points to these candlesticks. The top represents the price the stock was trading at when the trading day opened. The bottom is the price it was at when the trading day closed.

The line at the top line goes to the highest point the stock was trading at during the market hours. The bottom line goes to the lowest price the stock was trading at during the day.

These can also be used to help determine the future price movements of a stock. That is because when you combine days certain patterns form giving you a bullish or bearish signals.

footer for candesticks page