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Candlestick Charting For Dummies®
book

Candlestick Charting For Dummies®

by Russell Rhoads
April 2008
Beginner to intermediate content levelBeginner to intermediate
358 pages
11h 48m
English
For Dummies
Content preview from Candlestick Charting For Dummies®

Constructing a Candlestick: A Core of Four

For any security, each day of trading includes four key components in terms of data: opening price, closing price, highest price traded on the day, and lowest price traded on the day. These four pieces of data are needed to construct the individual bars that make up candlestick charts. Several bars, created by using the data from several days or periods, are generated in succession to produce a full candlestick chart.

Candlestick charts may be applied to the performance of securities over a variety of time periods. I use them on charts from as short-term as five minutes per bar to as long-term as a week per bar. A five-minute chart may be applied to a day or two of activity, while the weekly chart would be applied to a period of several years. Although those are two vastly different time frames, a candlestick chart is appropriate for both, and candlesticks would work for many different time periods in between.

Price on the open

The first piece of data used to construct a candlestick is the opening price for the day. For stocks, in most cases, it’s the official opening price on a specified primary exchange.

Recording an opening price on a candlestick

On a single candlestick, the thin vertical line is the wick, and the thick part in the middle is the candle. The opening price on a single candlestick will always be either the top or ...

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Publisher Resources

ISBN: 9781118051900Purchase book