What is a candlestick in trading?

A candlestick is a type of price chart used in technical analysis that displays the high, low, open, and closing prices of a security for a specific period. It originated from Japanese rice merchants and traders to track market prices and daily momentum hundreds of years before becoming popularized in the United States.

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.

What does the body of a candlestick mean?

The body of a candlestick is used to show the difference between an asset’s open and close price (or the current price for the candlestick on the far right). If the candlestick is green, then the bottom of the body represents the opening price and the top represents the closing price.

What is the difference between a line chart and a candlestick?

This is what sets candlestick apart from a line chart. A line chart only shows the closing price of a stock on a particular trading day. You cannot make out whether the stock hit a high or a low or was flat. Hence, line charts are one-dimensional. But candlestick displays four key information about a stock at one go – OHLC. Close (C).