In the stock market, the word “candlestick” or “Japanese candlestick” refers to a commonly used chart which not only displays rate patterns, but also shows the highest points, lowest points, opening and closing prices.
Typically, a candlestick chart is a combination of a linear chart and a bar chart. Bars, known as “candles” follow the linear pattern. The “real body”, a wide portion of each bar, indicates the range between opening and closing prices. Upper and lower “shadows” or “wicks” show the highest and lowest rates at which transactions occurred over the given period.
Candlesticks are popular among stock market investors because they include a great deal of information. In addition to showing ongoing patterns via the linear chart, candlesticks also show the highest and lowest points at which transaction were made within a market session and the opening and closing rates for each session.