Candlestick is close related to bar chart but it also contains price direction information. The candlestick bar consists of the body and the shadows.

Schematics of candlesticks
Opening and closing price makes up the body of the candlestick. When the opening price is lower from the closing price the body is left blank or white. When the opening price is higher from the closing price the body is filled with color (this color depends on the trading platform).
Upper shadows shows the high of the price and lower shadow shows the low of the price for the time span the trader selected in his chart.
Certain candlestick patterns have prediction qualities. Look at the figure below of a candlestick chart in real market environment.

This entry was posted on Thursday, March 15th, 2007 at 11:07 am and is filed under Types of Forex Charts. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.