Candlesticks are used by traders because they convey a lot of information in a easy to interpret design. So named because of its resemblance to an actual candlestick, each candlestick contains the following indicators:

Opening price
High price
Low price
Closing price


Timeframes can be set for a trader to the prices over a custom period. For example, a trader can set a timeframe to 15 minutes, and he/she would then see the opening, highest price, lowest price as well as the closing price over the 15 minute period. Every 15 minutes a new candlestick will be created.


If the candlestick is green, then the price has "Closed" above its "Open" during that time period.

If the candlestick is red, then the price has "Closed" below its "Open" during that time period.


Traders typically interpret a really long candle ( regardless if it is red or green ) as a volatile signal, whereas short candles indicate little volatility.


Once a trader has learnt how to understand a candle, it opens up the doorway to learning how to look for trading opportunities based on candlestick patterns. There are a lot of candlestick patterns that is beyond the scope of this article. 

If you are interested, go to https://www.investopedia.com/articles/active-trading/062315/using-bullish-candlestick-patterns-buy-stocks.asp to find out more.


Stay Frosty,

COSS team