What Are Candlesticks?
Candlesticks are a type of charting tool used in technical analysis to track the price movements of stocks, commodities, and other financial instruments. They provide traders with an easy-to-read visual representation of how prices have moved over time. Candlestick charts consist of four components: open, high, low and close (OHLC). The body or “real body” is represented by the vertical line between the opening and closing prices for that period. The upper shadow represents the highest traded price during that period while the lower shadow shows the lowest traded price.
The shape of each candlestick can tell you a lot about market sentiment at any given point in time. For example, if there is no upper wick on a candle it means buyers were able to push prices higher throughout that trading session without much resistance from sellers; this could be interpreted as bullish sentiment in the market. Conversely, if there is no lower wick then sellers had control throughout that session which could indicate bearishness in the markets. By studying these patterns traders can gain insight into potential future trends and make more informed decisions when entering trades.