Part 3: Japanese Candlesticks

Candlestick charts are the most widely used charts in technical analysis. They are the go to charts for every trader. Let us understand what candlesticks are?

Following is an example of a candlestick chart:-

They are not as hard to read as they seem. A candlestick tells 4 price points:-

Open Price- The first traded price during the formation of the candle.

High Price- The top of the wick/shadow indicating the highest traded price during the period.

Low Price- The lower wick/shadow indicating the lowest traded price during the period.

Close Price- Last traded price during the period of candle formation.

A bullish candle is depicted by green color where as a bearish candle is depicted by red color.