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Understanding Basic Candlestick Charts


Published on 2025-03-12 18:01:10 - Investopedia
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  • Stella Osoba is the Senior Editor of trading and investing at Investopedia ... experience as a financial writer and technical analyst. Using Bullish Candlestick Patterns To Buy Stocks Gauging the Strength of a Market Move Stochastics: An Accurate Buy ...

Candlestick charting is a popular method used in technical analysis to visualize price movements of financial assets over time. Each candlestick represents the price action of an asset for a specific period, displaying the opening, closing, high, and low prices. The body of the candlestick shows the range between the opening and closing prices; if the body is filled or colored, it indicates that the closing price was lower than the opening price (bearish), and if it's hollow or a different color, it means the closing was higher than the opening (bullish). The thin lines above and below the body, known as wicks or shadows, represent the high and low prices during that period. Candlestick patterns, like doji, hammer, and engulfing patterns, can signal potential market reversals or continuations, helping traders make decisions based on historical price movements and market sentiment.

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