Candlestick Patterns Charts are a type of price chart used in technical analysis that originated in Japan.
A Candle Characteristics
A candlestick Patterns chart is created using a data set that contains open, high, low, and close values for each period you want to display. The empty or filled part of the candle is called "the body" (also referred to as "the real body"). The lengthy skinny traces above and underneath the frame constitute the high/low variety and are called "shadows" (additionally noted as "wicks" and "tails"). The excessive is marked with the aid of using the pinnacle of the higher shadow and the low with the aid of using the lowest of the decrease shadow. If the stock closes higher than its opening price, an empty candle is drawn with the bottom of the body representing the opening price and the top of the body representing the closing price. If the stock closes lower than its opening price, a filled candle is drawn with the top of the body representing the opening price and the bottom of the body representing the closing price.
Compared to standard bar charts, many investors
take into account candlestick charts greater visually attractive and less
complicated to interpret. Each candle provides a simple, visually appealing
symbol of price action; a trader can quickly examine the relationship between
the open and close as well as the high and low.
The relationship between the
open and closed is considered vital information and forms the essence of
candles. Empty candles, where the close is greater than the open, show buying
pressure. Filled candles, where the close is less than open, show selling
pressure.
Long white candles have areas of strength to show pressure. The longer
the white candle is, the further the close is above the open. This shows that
prices advanced significantly from open to close and buyers were aggressive.
While long white candles are generally bullish, much depends on their position
within the broader technical picture.
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