A share market is a place where investors and traders use a platform to buy and sell shares of companies among themselves. Technical analysis is used to make successful investments in the stock market, and candlesticks are an important part of this technique.
What Is Candle Stick?
A candle stick or candlestick is a charting tool used in technical analysis. The tool provides information in graphical form and tells traders about the movement and direction of the price. A candlestick chart is a special type of bar graph that shows the open, close, high, and low prices for each day.
How Does Candle Stick Work?
The key elements of a candlestick chart are two curves – the bar and the diagonal. The bar is called the candle and the diagonal is called the diagonal. The candle opens at a particular point and leaves the highest and lowest points of its upper and lower levels. The color of a candle stick can also be important. When a candle is green, it shows that the price is moving up. When a candle is red, it shows that the price is going down.
How Many Types Of Candle Sticks Are There?
There are different types of candle sticks like Bullish Candles, Bearish Candles, Hammer, Shooting Stars, Enveloping, etc. Each of these types has its own importance and provides traders with information about the movement and bounce of the price.
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A candlestick is used by traders to identify price levels. It helps them to understand where the stock price is giving signals to buy or sell at a particular level. Many times candle stick patterns are used by traders to set trading rules and tell them that the stock is going to move in a certain direction.