Info 1: candlestick chart definition
Info 2: how the candlestick chart works
Info 3: candlestick chart vs bar chart
Info 4: example of candlestick chart
Opening information:
Candlestick breaks into two words candle and stick. candle means object like taper, stick means thin piece. Candlestick means taper-like thin piece.
So now let’s have a look at what is a candlestick, how the candlestick chart works in the public market, and what is the difference between a candlestick and a bar chart, finally one brief example about the candlestick chart.
info 1: candlestick chart definition
Candlestick charts are an advanced tech tool for displaying the price range in different variances. Katherine was a 70-year-old woman entrepreneur. She owned 3 private companies in California. Among them, the first was the name of the private company she founded at the age of 25 called Jerseyda.
It is a private company that manufactures hardware. The second is Phyrino, a company she founded at the age of 38.
It is a private company that manufactures wooden construction materials. 3rd is Sarbomium, a private company that manufactures Veterinary Medicine founded by Katherine at the age of 60.
But Katherine is now 70 years old. She has been hospitalized in Alaska due to health problems. So, she used a chart to observe the day-to-day events of her three organizations by using the price chart.
That displays the price range in the manner of two kinds of colored sticks in the form of candles such as green and red, to indicate the price increase in green and a red stick to indicate the price drop.
Using this price range, this chart helps her to identify the sales at all three companies to open, close, high, and low points better than an ordinary line chart. Clearly the red and green on the chart moved up and down, this movement is placed in the manner of a candle-shaped stick way.
Here are the sticks that are used by Mis. Katherine is what is named a candle stick chart. So now let’s dive into know these candlestick charts work and are involved in the whole public market.
Info 2: how candlestick works
Candlesticks don’t represent any specific thing or object, instead, they are simple sticks in the form of candles to arrange the price action in different manner.
Using this stick tracking helps the traders to know how the price of any amount of Securities would react and move from time to time better than an ordinary normal line graph price chart.
However, this candlestick manner chart would represent the five fundamental matters open, close, high, low, and weak.
Open illustrate at which point or price certain security would start moving after the close. If the open moves below the previous closed price it shows the candlestick in colors of red, if not it shows in green.
The closed price elaborates on the end price after the market session is over. If the closed price arrives above the open price at the end, the candle stick will be shown in green color, if not it’s shown in red.
Next, the high price demonstrates the peak of the security point for a certain amount of period, it’s candlestick shown in the manner of the green colors or if the trend is not strong enough it shows red color because of a weak trend.
Then low prices introduce the bottom point of the one security for a certain amount of days, the candlestick shown in red or if the trend is not weak enough it’s shows a green color because of pull from of strong up trend
Kindly weak price mentions the lack of enough buyers and sellers on a certain trend, so the candlestick shows an empty line indeed of green and red candlestick above or below the specific price.
Therefore any trading chart that takes place price range with a stick like a candle is considered a candlestick chart.
Some people use the candlestick color as black and white instead of red and green so don’t mingle, the function of the candlestick chart are same, even if the color changes,
Most people confuse the candlestick chart and bar chart so let’s jump into the key difference in it anyway.
Info 3: candlestick and bar chart
The candlestick and the bar chart are occupied and constructed with the same purpose of function to display the price range of any securities in the market.
So two of them had no big difference, the key matter is if the price range is drawn with a candle-like shape separate from a candlestick chart or if the price range is used with metal like the sharp bar is known as a bar chart.
To make more clear about candlestick, let’s look into one brief example below.
Info 4: example of candlestick chart Say you are a short-term trader who invests in the public commodities market. You planned to buy at those companies when prices were low and sell when prices were high.
To identify the price behavior range of the market you would use the stick chart by knowing the two functions of out of it, down is for red and up is for green and your brother used an ordinary line chart as
Here the chart used by you for the trading is known to be a candlestick chart anyway.