A candlestick is a type of chart used in technical analysis to display the high, low, open, and close prices of a security over a given period of time. It is often used to visualize the price action of a security and to identify patterns and trends that may indicate a particular market bias or provide trading signals.
Candlesticks consist of a vertical line with a horizontal line extending from each end. The vertical line represents the range of prices for the period being charted, with the top of the line representing the high price and the bottom of the line representing the low price. The horizontal lines, known as "candlestick wicks," represent the open and close prices for the period. If the close price is above the open price, the candlestick is typically colored green or white, indicating an upward trend. If the close price is below the open price, the candlestick is typically colored red or black, indicating a downward trend.
Candlestick charts are a popular tool among technical analysts and traders, and they can provide valuable insights into the price action and sentiment of a security. However, it is important to note that they should be used in conjunction with other analysis techniques and should not be relied upon solely for investment decisions.
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