Candlesticks are used in financial charts to show how prices change over a selected time frame, such as one minute, one hour, or one day. Each candlestick shows four key data points: the price at the beginning of the period (open), the highest and lowest prices reached (high and low), and the final price (close).
A candlestick has two main parts: the body, which shows the distance between the open and close, and the wicks or shadows, which show the high and low prices. If the close is higher than the open, the candlestick represents upward movement. If the close is lower than the open, it represents downward movement.
Candlesticks help traders see whether price movement during that period was strong, weak, stable, or volatile. When viewed together, candlesticks form patterns that help traders understand market behavior, momentum, and possible trend changes.
Candlestick charts give traders a clear picture of price action and market behavior. They help identify trends, reversals, and important market levels in a simple visual format.
Traders look for repeating formations made from one or several candlesticks. These patterns may signal shifts in buying or selling pressure. For example, long bodies may show strong movement, while short bodies may show hesitation. Traders compare patterns with volume, trend direction, and other indicators before making decisions.
The distance between the open and close helps show whether buyers or sellers were stronger during that time period. A larger body suggests active movement, while a smaller body suggests limited progress in either direction. This helps traders judge momentum and market strength.
Short time frames, like one-minute or five-minute charts, show quick market changes but can be noisy. Longer time frames, such as daily or weekly charts, smooth out short-term movements and highlight broader trends. Traders choose time frames based on their strategy and how quickly they plan to make decisions.
A daily candlestick for a stock shows it opened at $50, moved between $48 and $52 during the day, and closed at $51. Traders use this single candlestick, and others around it, to understand the market’s direction and strength.
FinFeedAPI’s Stock API provides the open, high, low, and close values needed to generate candlestick charts. Developers use this data in trading platforms, charting tools, and technical analysis systems.
