How “candlestick charts” are used


How “candlestick charts” are used

In: Economics

For a stock that is increasing in price, the bottom of the candle is the open price and the top is the close price (usually, for one day, but it can be any time period). The bottom wick is the low and the top wick is the high (again, for the same time period). If it is decreasing in price, everything is opposite. They’re used for stock analysis and show four important data points, rather than just one on a line chart. They can also be used for options and other financial assets.

It’s for showing a varying value over a time period.

Designed for a stock price over a day. It looks like a candle, with a wick at the top and bottom.

The body of the candle shows the opening and closing price for a day. The upper and lower wicks show the highest and lowest price for that day.

The candle is solid colour if the price has ended the day down, and not solid if the price has ended the day up.

Show 30 or 90 days of candles together and you quickly get a picture of price trends together with volatility by day and over time. Which can give a better picture of just averaged price over time.