| Many new investors understand that the only way to | | | | can be solid or hollow, and thin lines, are often |
| make money in the stock market is to find a way to | | | | attached at the top or bottom of the body show |
| "buy low and sell high." But then they look at the | | | | the range of prices traded during that specific period. |
| constant fluctuations of the most popular stock | | | | One of the most interested characteristics of the |
| market indices, and they start to wonder how it is | | | | basic candlestick chart is that you can learn a lot |
| ever possible to know that a price has sunk low | | | | about the day's market activity just by paying |
| enough to make it a good time to buy, or risen high | | | | attention to the nuances that are contained in it's the |
| enough to make it the most profitable time to sell. | | | | form of color, size, and length of its elements. When |
| While some investors base their predictions on social | | | | looking at a chart, the black or red candle stick |
| demand, company financial history and perceived | | | | indicates that the stock closed lower than its opening |
| value, technical analysts choose to watch a stock's | | | | price, a net loss. Candlesticks that have a white or |
| trends and patterns over time. The candlestick chart | | | | green body, however, indicate that the stock closed |
| is one of the oldest stock charts, and every new | | | | higher than its opening price, representing a net gain |
| investor should become comfortable with it. | | | | for the day. |
| In order to fully understand how the candlestick | | | | Once you become more familiar with it, you might be |
| chart can be used to track stock prices and inform | | | | tempted to think that the candlestick chart can tell |
| your future decisions of whether to buy or sell at a | | | | you everything you need to know about the daily |
| certain time, you have to understand how the chart | | | | stock market activity, but there are some things that |
| was created, and what its original purpose was. | | | | this chart is unable to communicate. This chart will be |
| Created by early Japanese rice traders, the | | | | unable to tell you the different price points traded |
| candlestick is a modification of the traditional bar | | | | during a particular day, as the body is only able to |
| chart, which indicates increases or decreases in the | | | | indicate opening and closing prices, and the shadow |
| price of a certain stock. The body of the candlestick | | | | can only indicate the range of prices. |