📊 How to Form a Candlestick in Charts
Candlestick charts are one of the most popular tools used in technical analysis. Each candle tells a story about the price movement of a stock during a specific time period (minute, hour, day, week, etc.).
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🔍 Key Elements of a Candlestick
Each candlestick consists of 4 important prices:
- Open: Price when the time period starts
- High: Highest price reached during the time period
- Low: Lowest price reached during the time period
- Close: Price when the time period ends
🟩 Bullish Candlestick (Green)
A bullish candlestick forms when the closing price is higher than the opening price. This indicates buyers were in control during the session.
- Bottom of the body: Opening price
- Top of the body: Closing price
- Upper wick: High point
- Lower wick: Low point
🟩 Bullish Candle (Price Increasing)
If the closing price is higher than the opening price, the candle is green (bullish).
- Open: ₹190
- High: ₹230
- Low: ₹170
- Close: ₹210
🟥 Bearish Candlestick (Red)
A bearish candlestick forms when the closing price is lower than the opening price. This indicates sellers dominated the session.
- Top of the body: Opening price
- Bottom of the body: Closing price
- Upper wick: High point
- Lower wick: Low point
🟥 Bearish Candle (Price Decreasing)
If the closing price is lower than the opening price, the candle is red (bearish).
.png "What is a Candlestick")
- Open: ₹190
- High: ₹200
- Low: ₹160
- Close: ₹165
📌 Summary: Candlestick Formation
The shape of a candlestick gives important insights:
- Long body: Strong buying or selling pressure
- Short body: Market indecision
- Long wick: Rejection of higher/lower prices
🧠 Candlestick Summary
- Wick (Shadow): Shows the range between High and Low
- Body: Area between Open and Close
- Color: Green means price went up, Red means price went down
📈 Why Candlesticks Matter?
Reading candlesticks helps you understand market psychology and predict trends. It’s the foundation for recognizing patterns like Doji, Hammer, Engulfing, etc.
🖼️ Tip: Refer to the image below to understand the structure of bullish and bearish candles visually.
Visual Example with Prices:
This image shows how a candlestick is formed with real price values for better understanding.
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