A charting method introduced by Japanese traders, displaying the high, low, open and close of a period. As the name suggests, these representations of market data look like candlesticks.
The candlestick chart was likely developed in the 1600s by a legendary rice trader. The body represents the open and close price while the vertical lines or “whiskers” represent the high and lows of the period. The color reflects the movement during this period.
Some traders consider trends in candlestick shapes as a way to guide their trading strategy. In this case, they are looking at the sentiment and momentum of the underlying market for a certain financial instrument.
