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Candlestick

  • The Candlestick is a graphic data visualization method used in the financial market. It is similar to a bar graph but has more information.

    In order to build a candlestick graph we will need the opening and closing values along with the values of minimum and maximum, an index and a currency.

    candlestick

    Every candle is called Candle Line, while the rectangle built by the prices of opening and closing prices, whether it is positive or negative, is called the Real Body.

    The lines that begin from the highest price and arrive to the closing price are called Upper Shadows, those that begin from the opening price and touch the minimum prices are called Lower Shadows.

    It is possible to distinguish four kinds of candles:

    • Long days, which can be either white ( positive ) or black ( negative ),  are candles with a wide real body between the opening and the closing price;
    • Short days, instead, are candles with a very small real body between the opening and the closing price;
    • Spinning tops are like short days candles but have extended shadows. Spinning tops represent strong indecision in the market;
    • Doji are candles where the price of opening is identical as the price of closing or when the two prices are very similar, but not identical.
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