Candlestick charts provide information about trading highs and lows. They were invented in Japan and became a common financial tracking tool worldwide. White candlesticks indicate price increases, while black ones indicate decreases. Candlestick charts help with technical analysis and decision making on investments.
In the financial world, a white candle is completely symbolic. It is part of a visual representation of stock or stock prices called candlestick charts. Candlestick charts provide specific information about trading highs and lows during market days or other time periods.
Candlestick charting is said to have been invented in Japan in the 19th century. Eventually it became a common financial tracking tool in America and around the world. The candlestick chart still has various shapes and forms named in Japanese. Many of the ancillary patterns in a candlestick chart reveal a lot about how a stock or asset trades over time.
In a candlestick chart, a “candlestick” shows the difference between a stock’s opening and closing prices during a trading day or other time period. If the opening price was lower than the closing price, the candle will be white. This means that the price has increased and not decreased during the trading period. If, on the other hand, the opening price was higher than the closing price and the price fell during the trading period, the candle will be black. For those who have invested in a stock hoping for growth, a series of white candlestick patterns is desirable.
The candlesticks representing trading periods in the candlestick charts are arranged in a horizontal pattern that forms a combination of a bar graph and a drawn line. The candlestick chart also has other useful features such as a “wick” that shows if there were prices above or below the difference in the opening and closing price. In that case, the outside price will be represented by a thin line coming out of the top or bottom of the white or black candlestick.
A candlestick chart helps with what financial experts call “technical analysis,” which involves looking at a stock’s past prices and other information to determine how good an investment is. The visual aid offered by the candlestick chart helps in decision making on stocks and other investments. Viewing daily candlesticks can show how interest in a stock is rising or falling. In market terms for a specific stock, professionals refer to white candlestick patterns and interest building as “bullish” and falling interest as “bearish”. Overall, candlestick charts can be a key part of getting a quick view of what a stock has done in the past.
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