They say a picture paints a thousand words. Rightfully so. Even in stocks and stock charts. One such chart is the candlesticks chart. I want to deal with the basic first: what do these Christmas-themed candles mean?
These simple candles can spell the difference between a thousand peso gain or loss. And through the years, many books and blogs have been written about it. I myself remains to be a student of the candlestick charts and patterns. Because really, you can create a whole story by merely looking at the sticks and the trends. I won’t go into detail about its history, you can go to this site for more details and a detailed study. Or contact me for free ebooks on technical analysis.
As I’ve said, if fundamentals can tell you which stocks to invest on, technicals and charts can tell you when to enter or exit. In this post, I will share about the basics of how to read the sticks, plus share some useful sources on where to get more information about it.
I was just feeling a bit artsy fartsy hence I created below pictures. Study them for a moment.
- A green or white candle depicts a price appreciation for that day (bullish), hence opening price is low while closing price is high
- A red or black candle depicts a price depreciation for that day (bearish), hence opening price is high while closing price is low
- The candle wick, or lines, or shadows show the highest and lowest prices of the stock for the day. If there are no such lines, it means that the opening / closing price were also the highest / lowest prices for the day
Types and Variations