In trading, a candlestick is a chart indicator that shows the price movement within some period of time (a minute, an hour, a week, a month, etc.).

There are four main candlestick components: open, close, high, and low. The open of a candlestick represents the price of the first order in the trading period, while the close represents the price of the last completed order during the period. High and low represent the highest and lowest prices of executed trades within the same period.

When the close price is higher than the open price, a candlestick becomes green, signalling an uptrend. If the close price falls below the open price, the candlestick becomes red and we say that the price has dropped. Candlesticks are practical for tracking market trends and even making predictions.

Actually, no one knows who the creator of candlesticks as a trading pattern is. However, Munehisa Homma from Japan is known as the first person to use them when trading at the Ojima Rice Market in Osaka. That’s why we also call them “Japanese candles.”