FxPro Help Centre - Glossary

Candlestick Chart

Developed by Japanese rice traders in the 19th century, candlestick charts have been widely adopted by contemporary traders as a method of plotting price action. Candlestick charts are a hybrid of line and bar graphs with each candlestick representing a unit of time an asset is being monitored at. A candlestick is composed of a bar-shaped body and an upper and lower wick (or shadow). The body represents the opening and closing prices for the given duration while the wicks represent the highest and lowest prices the asset reached within that timeframe. Candlesticks are coloured differently to represent a higher closing than opening (indicating an upward price movement) and a lower closing than opening (indicating a downward price movement.) Traditionally, bullish candlesticks were coloured white and bearish ones were coloured black; however nowadays traders can set their own user-defined colour schemes.