Candlestick charts are an effective way of visualizing price movements. There are two basic candlesticks:
- Bullish Candle: When the close is higher than the open (usually green or white)
- Bearish Candle: When the close is lower than the open (usually red or black)
There are three main parts to a candlestick:
Upper Shadow: The vertical line between the high of the day and the close (bullish candle) or open (bearish candle)
Real Body: The difference between the open and close; colored portion of the candlestick
Lower Shadow: The vertical line between the low of the day and the open (bullish candle) or close (bearish candle)
Candlestick patterns can be made up of one candle or multiple candlesticks, and can form reversal or continuation patterns. Commodity.com has many detailed explanations of these candlestick patterns; the links are given below:
- Bullish Engulfing Pattern
- Bearish Engulfing Pattern
- Dark Cloud Cover
- Dragonfly Doji
- Evening Star
- Gravestone Doji
- Hanging Man
- Inverted Hammer
- Morning Star
- Piercing Pattern
- Shooting Star
- Tweezer Tops & Bottoms
If you prefer a video explanation of candlesticks, then please see Candlestick Charts Explained.
Interested in Trading Commodities?
Start your research with reviews of these regulated brokers available in .
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 73.0%-89.0% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.