What are candlestick patterns?

Candlestick patterns are technical trading tools that have been used for centuries to predict price direction. There are dozens of different candlestick patterns with intuitive, descriptive names; most also have a corollary pattern between the upside and downside.

Why do traders use candlesticks?

Traders use the candlesticks to make trading decisions based on regularly occurring patterns that help forecast the short-term direction of the price. Traders use candlestick charts to determine possible price movement based on past patterns.

What does a long black candlestick mean?

After a long advance, a long black candlestick can foreshadow a turning point or mark a future resistance level. After a long decline, a long black candlestick can indicate panic or capitulation. Even more potent long candlesticks are the Marubozu brothers, Black and White.

What is a daily Candlestick?

Just like a bar chart, a daily candlestick shows the market's open, high, low, and close prices for the day. The candlestick has a wide part called the "real body." This real body represents the price range between the open and close of that day's trading.