Candle graph is a style of chart that depicts price movements of a stock, commodity, or other financial instrument. Each candlestick on the graph represents a time frame.
Each candlestick symbol is shaped and colored differently, depending on the size of the price movement. This is a useful way to interpret the mood of a market and make predictions about its future direction.
The open and close prices are the two most important aspects of a candlestick. If the close price is greater than the open, the candlestick is outlined in the “border-up” color; if the open price is less than the close, the candlestick is outlined in the”neutral-tick” color.
Using candlesticks is a key component of technical analysis, a type of trading strategy that seeks to use past price movements to determine trends and predict future opportunities. Understanding the meaning of candlesticks is essential for any trader, because it allows you to gauge a stock’s or asset’s mood.
A long upper shadow signals a bearish trend, while a long lower shadow indicates a bullish trend. The longer the upper or lower shadow, the more reliable the signal.
A topping pattern occurs when the last candle in a series opens below the small real body from the previous day’s session. This is a sign that the buyers are stalling and sellers are taking control. It’s also an indication that the price could head lower.