Candlestick Chart Patterns
Candlestick charts have been used in Western trading for many years and are a very popular method for charting the price movements of a given security over time. A typical candlestick chart is made up of a series of bars, called candles, of different heights and colors. The color of each candle depends on the stock's price action on the given day. An unfilled candle, displayed on the left, is made while the initial cost is lower than the security's end cost.
Each bar can represent a minute, a day, a week or even a month, but the time period chosen does not affect the color of the candle. A hollow bar will always be created when the closing price is higher than the opening price. This type of candle shows that buyers are in control of the stock because the price is likely to rise during that time, but it does not provide enough information to predict what will happen next. A solid bar, usually red in color, is created when a security's closing price is lower than its opening price. This bar shows that the asset is trading down over the period and the bears are in control.
Any color can be chosen to create any candle, but regardless of which color is used to depict an unfilled bar, it is always used to represent the length of time over which the price has increased. . In the image above, In the picture above, we have picked blue. And the color of the filled bar, usually red but not always, is used to illustrate periods of falling prices.
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