Candlestick and Doji types What is a Candlestick?

Candlestick and Doji types

What is a Candlestick?

A candlestick is a type of price chart used in technical analysis that displays the high, low, open, and closing prices of a security for a specific period. It originated from Japanese rice merchants and traders to track market prices and daily momentum hundreds of years before becoming popularized in the United States

The wide part of the candlestick is called the “real body" and tells investors whether the closing price was higher or lower than the opening price (black/red if the stock closed lower, white/green if the stock closed higher).

The candlestick's shadows show the day's high and low and how they compare to the open and close. A candlestick's shape varies based on the relationship between the day's high, low, opening and closing prices

What Is a Doji?

A doji—or more accurately, "dо̄ji"—is a name for a session in which the candlestick for a security has an open and close that are virtually equal and are often components in patterns. Doji candlesticks look like a cross, inverted cross or plus sign. Alone, doji are neutral patterns that are also featured in a number of important patterns.

Depending on where the open/close line falls, a doji can be described as a gravestone, long-legged, or dragonfly