Types of Charts: Candlestick Chart
Candlestick charts have been around for hundreds of years. They are often referred to as "Japanese candles" because the Japanese would use them to analyze the price of rice contracts. A candlestick chart consists of a series of candles, each candlestick representing one time period. A candlestick looks as follows:
Similar to bar charts, candlestick charts also display the Open, High, Low, and Close price of a certain period. The difference is the use of color to show if the price went up or down over the period. Note that there are no specific colors for growing and falling candles. Normally, an empty candle (in our example the white one) means that the price has been growing during the period and a filled candle (in our example the red one) means that the price has been falling during the period.
The chart below is an example of an hourly candlestick chart for the EUR/USD currency pair.
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