Candlestick Charts

Candlestick charts are Method of drawing commodity futures charts which originated in Japan. Requires the presence of Open, High, Low and Close price data to be drawn. There are two basic types of candels, the white body and the black body. As with regular bar charts, a vertical line is used to indicate the periods (normally daily) high to low. When prices close higher than they opened a white rectangle is drawn on top of the high-low line. This rectangle originates at the opening price level and extends up towards the closing price. A down day is drawn in black. The combination of several candles results in patterns with names like two crows or bullish englufing patern which give insight into future commodity price activity. For other Japanese charting approaches also see Renko and Kagi charts.

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