CHARTTHREAD

Candlestick chart

A candlestick chart draws each period as a candle: a body from the open to the close, coloured by direction, and thin wicks reaching the high and the low. It is the default chart on almost every trading platform.

It carries the same information as a bar chart, but the coloured body shows at a glance whether the period closed up or down. Candles come from Japan: legend credits the rice merchant Munehisa Homma (1724 to 1803), who traded at the Dōjima Rice Exchange in Osaka, though they may have appeared later, after 1850. Western traders adopted them after Steve Nison’s 1991 book Japanese Candlestick Charting Techniques.

Learn more: price charts explained and what is a candlestick.