|Candlestick charts are an efficient way to look at a lot of information about a stock's price at once. By showing how much the price has moved up or down in a certain time period, candlestick charts help investors better understand how the price is moving.|
How do I read a candlestick chart?
While a normal line chart shows you one piece of information, the close price, each candlestick shows you four pieces of information: the open, high, low, and close price during a certain time period.
The body, or thick part, of the candlestick represents the difference in open and close prices. If there is no body, it means the open and close prices are the same. The wicks, or thin lines, of the candlestick represent the high and low prices in a given time period.
Open Price: The stock price at the beginning of the time frame for that candle
High Price: The highest price reached during the time frame of the candle
Low Price: The lowest price reached during the time frame of the candle
Close Price: The price of the last trade during the time frame of the candle
Bullish CandlesticksA “bullish candlestick” is green showing that the stock’s price has increased. This means the close price is above the open price.
A “bearish candlestick” is red showing that the stock’s price has decreased. This means the close price is below the open price.
The price difference between the top and bottom of the thin line shows how volatile the price was in that time frame. Tall lines indicate that the price has been very volatile. Short lines imply that the price was relatively stable moving in one direction during that time frame.
On stock charts, additional bars below the candlesticks represent the total number of shares traded during the time period for that candlestick. Investors use this to understand the interest in a stock.