Published On: Wed, Jan 30th, 2013

Japanese Candlestick Chart

The Japanese Candlestick chart is a graphic tool used by technical analysts to help them see a securities price movement data during a set time frame.

The timeframe of the chart produces one candlestick per that measure of time.  In other words, a 5 minute chart will show one candlestick every five minutes, while a 1 minute chart would show one candlestick every one minute.  The candlestick is made of a body or thick part of the candlestick and two tails, or upper and lower lines extending beyond the body.  The body represents the values of the opening and closing prices (during that time frame.)  A lower closing price would be indicated by a red candlestick body and a higher closing price would be indicated by a green colored candlestick body.  If the price of the security moved higher or lower than the opening or closing price during that timeframe it will be shown by a thin line extending beyond the ends of the body.  These lines are called tails.

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About the Author

- Marcus Holland has been trading the financial markets since 2007 with a particular focus on soft commodities. He graduated in 2004 from the University of Plymouth with a BA (Hons) in Business and Finance.