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Candlestick chart definition
A candlestick chart is a chart that plots the open, high, low, and close prices of an instrument over a chosen time period. Each candle on it covers one interval, such as one minute, one hour, one day, or one week.
Each candle has a body and a wick. The body spans the distance between the open and the close, and the wick, also called the shadow, marks the highest and lowest prices the instrument reached during that interval. A candle that closes above its open is bullish, and one that closes below its open is bearish.
A candlestick chart is the full series; a single candlestick is one bar within it. You read the chart for trend, momentum, and volatility across many intervals, and you read an individual candlestick for what happened in a single interval.
Candlestick chart Example
You open a 1-hour candlestick chart for GBP/USD. One candle on it shows four prices:
- Open: 1.2700 - High: 1.2760 - Low: 1.2685 - Close: 1.2745
The candle opened at 1.2700, traded as high as 1.2760, dropped as low as 1.2685, and closed at 1.2745 across that hour.
Because the close sits above the open, the candle is bullish and shows price rose over the period.
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