What is a Candlestick Chart?

Candlestick Chart Definition – A Candlestick Chart is a type of chart that consists of four major prices: high, low, opening and closing. The body of the candlestick bar is formed by the opening and closing prices. The body of the bar is left blank to indicate that the opening was lower than the closing price. Conversely, if the currency closes below its opening, the body of the bar is filled with a color. The rest of the range for the period chosen is reflected by the length of the “wick” and the “tail” on either end of the candlestick bar. Japanese rice traders are given credit for developing the charting style. Trading tips arise when forms are repeated for a few periods, when a long tail or bar forms, or when wicks shorten. An accomplished forex trader will recognize these signals and design an appropriate execution strategy to profit from the signals given.

Risk Statement: Trading Foreign Exchange on margin carries a high level of risk and may not be suitable for all investors. The possibility exists that you could lose more than your initial deposit. The high degree of leverage can work against you as well as for you.