basics

Basics

Candlesticks represent the relationship between buyers and sellers in the market. When you look at a candlestick you will find four things about it. The open, the close, the high, and the low. The candlestick has a real body, and shadows, upper and lower shadows.

The real body consists of the open and close price. When the close price is higher than the open, it is bullish. When the close price is lower than the open, it is bearish. The upper shadow is known as the high or the session high and the peak of that upper shadow is known by itself as the high. The lower shadow is known as the session low and the peak of the lower shadow is known as the low itself. Long, real bodies signify high buying/selling pressure, and short bodies signify less pressure.

A candlestick that has a long upper shadow but a short lower shadow, means that the buyer's worked hard to push the market up for the sellers' brought it down to the open in price. Vice-versa, a candlestick with a long lower shadow and a short upper shadow, signifies that the seller is trying to push the market down, but the buyer has brought it up closer to its closing price.

Fun Facts

Candlesticks in a pattern are known as days. So if you have three candlesticks in a pattern, the first candlestick is known as the first day, the second, second day, and the third is known as the third day.

When in the markets candlesticks will be represented by either black and white or green and red, with a black signifying a bearish candle and a white signifying a bullish candle, same with a red signifying a a bearish and a green signifying a bullish

Shadows are also known as wicks. The shadows which are the session high and the session low are also known as wicks.