Let’s swim among all the different chart types –
This is a normal candlestick chart.
This is a hollow candle chart.
This is a bar chart.
Like most traders, we prefer normal candlestick charts which came around 1868. Patterns emerged, Market prediction got serious eyes into it and after the Japanese stock market opened at the 1870s, it became significantly important.
This needs four data – Open, High, Low, and Close for each time period you want to display the chart. Let’s suppose we are charting for a daily timeframe!
If the prices go up that day (closing price is more than opening price) then the candle is colored green and in case of the price going lower that day, the candle is colored red.
It encaskets a more visual and interpretable version than the normal table of prices or other charts like a bar chart that doesn’t color the candles. This is a detailed example of a bull candle (green one) and a bear candle (the red one).
The filled portions (colored with green or red) are called ‘body’ and the wicks are called ‘shadow’.