Lesson Seven: Japanese Candle Sticks Explained
There are different forms of visualising charts. Most brokerage platforms will give you line charts, bar charts, and the most popular, candle stick charts. A candle stick consists of 4 aspects. The high, low, open and close.
Let’s take a look at these two candles. We are using green to represent a bull candle, and red to represent a bear candle, but the colours can be modified in your trading platform. The open and close of the candle is what determines if it is a bull or bear candle.
If the candle opens and closes higher, like green candle, it is a bull (positive) candle.
If the candle opens and closes lower, like the red candle, is a bear (negative) candle.
You can also see the high and low on both candles branching out. These are called “Wicks”. They show the highest and lowest price the candle has reached during the time frame. We can determine the time frame we want from our trading platform. We can look at 5 minute, 30 minute, 1 hour, daily, monthly time frames and more depending on your trading platform.