Candlestick charting is simply a method of displaying price information in a market. Unlike a simple line chart, each series on a candlestick chart contains four data points:
- The opening price
- The high price
- The low price
- The closing price
Here’s an example of what candlesticks look like:
As you can see, there’s a red candlestick, and a green one, and they both represent different things. When a candlestick is red (this color may vary by platform and can be changed), it means that the closing price was less than the opening price.
Conversely, when the candle is green, that means that the closing price was higher than the opening price.