How to read candlesticks charts for day trading?
Asked 5 years ago
Hi, I'm new to trading, and I've just started getting the hang of stock charts. How do I read it in terms of day trading?
Andia Rispah Igobwa
Monday, November 15, 2021
A candlestick is made up of three sections: the upper shadow, lower shadow, and body. The body is green or red in color.
Each candlestick represents a distinct period. The candlestick data summarizes the transactions that were completed during that period. A 5-minute candle, for example, reflects the data of five trades conducted in 5 minutes.
Every candlestick has four data points: open, high, low, and close. The period's beginning and end are marked by the open and close, which are the first and last transactions of the period. The body of the candle is defined as the open and close. For that period, the high is the most expensive trade, and the low is the least expensive transaction.
The highest price is represented by a vertical line that runs from the top of the body to the highest price, known as a shadow, tail, or wick. The lower shadow or tail is the candle's low, which is represented by a vertical line that extends down from the body.
If the close is greater than the open, it's colored green representing a net price rise. When the open is above the close, it is colored red to indicate a net price decline.
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