Learn How Candlesticks Are Formed
A candlestick chart reflects a given time period and provides information on the price's open, high, low, and close during that time. Each candlestick symbolizes a different period.
Here are the main 4 elements of a candlestick:
Body
The body is the major component of a candlestick, and it's easy to spot because it's usually large and colored.
Within the interval, the body informs you of the opening and closing prices of the market. The open will be below on a green candle. The reverse is true for a red candle. The market declined during the time, thus the open is the top of the body and the close refers to the bottom of a candle.
Wick
The wick is the line that extends from the top to the bottom of the body of a candlestick.
The upper wick emerges from the body's top and indicates the greatest price achieved throughout the time. The lower wick commonly referred to as the tail, is at the body's bottom, marking the lowest price.
Open Price
The initial price exchanged during the development of a new candle is represented as the open price. If the price begins to rise, the candle will become green and the candle will turn red if the price falls.
Close Price
The closing price is the most recent price exchanged during the trading phase. In most charting systems, if the closing price is lower than the open price, the candle will turn red by default. The candle will be green if the close price is higher than the open price.
High Price
The highest price exchanged throughout the time is shown by the upper wick or top shadow. Its absence indicates that the price at which the asset opened or closed is the highest traded price.
Low Price
The lowest price exchanged throughout the time is shown by the lower wick or low shadow. When there is no such lower wick or shadow, this indicates that the price at which the asset opened or closed is the lowest traded price.
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