Also known as candlesticks. A very popular method of displaying the Spot price on charts over a time period. The candle takes the form of a rectangle which may be filled or empty. A "Wick" may protrude from the top or the bottom or both.
The body of the candle represents the distance between the opening and closing prices, an empty (hollow) or green filled body means that the price opened at the bottom level of the body and closed at the top, while a black or red filled body means the closing price is the one a the bottom of the candle body. The wick at the top shows the highest point the price reached during the period and the wick at the bottom shows the lowest point.
Strongly favoured by Japaneses traders, there are many well established (and named) patterns formed by candles, further study is strongly recommended if not essential in order to recognise the basics.
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- 06-30-2008 12:33 PM