Candlestick Charts Basics

The trading screen on any cryptocurrency exchange is likely to include a candlestick chart that describes the price movements of the selected currency. The candlestick chart looks like a combination of line-chart and a bar-chart.

Candlestick Chart

Each candlestick provides several pieces of information over a certain time period. The candlestick itself looks like a box plot, although this is not related. The top and bottom of each candlestick represent the high and low during the period. The thick area in between is called the real body, and is defined by the open and close. The body will normally have a color depending on whether the price has increased or decreased. In the case of a decreasing (bearish) candlestick the body will often be black or red, while it will be white or green in the event of an increasing (bullish) candlestick.

Candlestick Basics

Analyzing patterns in these candlestick charts is a form of technical analysis, as they are believed to hold valuable information with regard to future price movements.