Candlestick Charts

The candlestick chart has Japanese origins and is probably the most useful of the three main chart types.

When reading a candlestick chart, it is important to understand the basic candle structure. Each candlestick represents a timeframe – this could be anything from one minute to an entire week.

Irrespective of the timeframe, a candlestick symbolises the following values:

  • Opening price at the start of the chosen timeframe
  • Closing price at the end of the chosen timeframe
  • Peak price within the chosen timeframe
  • Lowest price within the chosen timeframe

According to the opening and closing price, the candlestick can be used to decide whether a session finished ‘bearish’ or ‘bullish’:

  • Bullish – The closing price was greater than the opening price
  • Bearish – The closing price was less than the opening price

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