HOW TO INTERPRET CANDLE CHARTS?
A candle chart is a simple chart made up of individual candles, which investors use to understand price action. The price action of the candles involves identifying where the price opened for a period, where the price closed for a period, as well as the highs and lows of the price for a specific period.
🟡 OPENING PRICE - Shows the first price traded during the formation of the new candle;
🟢 HIGH PRICE - The top of the upper wick/shadow represents the highest price traded during the period;
🔵 LOW PRICE - The bottom of the lower wick indicates the lowest price traded during the period;
⚪ CLOSING PRICE - It is the last price traded during the period of the candle's formation;
🔴 THE WICK - Also referred to as shadows, are the extremes of the price for a specific period on the chart;
🟤 DIRECTION - It is determined by the color of the candle. If the price of the candle is closing above the opening price of the candle, the price is moving in the upward direction and the candle will be green;
⚫ RANGE - The difference between the highest and lowest price of a candle is its range, which can be calculated as (range = highest point - lowest point).
