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Technical analysis

Candlestick

By Jarosław Wasiński • Published: • Updated:
A chart element that shows the open, high, low, and close of a price period. The body represents the open-to-close range; the wicks (shadows) show the extremes. Japanese candlesticks are the most popular chart type in forex. See Chart types and Candlestick patterns.
Example. For an illustrative EUR/USD Bid bar, O = 1.1000, H = 1.1030, L = 1.0990 and C = 1.1020. The body is 20 pips, upper wick ten and lower wick ten; total range is 40. The candle does not reveal whether High occurred before Low.

Body and shadows

The body spans Open and Close; the upper shadow spans the greater of those values to High, and the lower shadow Low to the smaller. Colour commonly identifies Close above or below Open, but colours are configurable. A candle with equal Open and Close can still have a substantial range. Distinguish body length from the entire range.

Feed and interval

Record symbol, timezone, aggregation boundaries and whether prices are Bid, Ask, Mid or actual trades. Different FX feeds can construct different candles. High and Low belong to that series, not every executable quote worldwide. During formation, extrema and the current closing value can change; the final shape is available only at completion.

Information limits

OHLC does not recover intrabar event order or a missing quote side. If both stop and target lie inside a bar, the four values alone may not determine which occurred first. Shapes can support explicit hypotheses, but do not identify participant intentions or guarantee direction. Execution requires appropriate real prices and costs, not merely the displayed candle colour.

FAQ

Can a green candle still contain a large decline?
Yes. Close can exceed Open even when Low is far below both.
Does a Bid candle reveal the exact Ask history?
No. The other quote side or an explicitly described spread model is needed.

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Jarosław Wasiński

Editor-in-chief, ForexMechanics.com • Macro & FX analyst

Independent analyst and practitioner with over 20 years of experience in financial markets. Actively involved in Forex since 2007, with a focus on fundamental analysis, OTC market structure, and disciplined capital risk management.

  • Creator and editor-in-chief of MyBank.pl, providing reliable financial education since 2004.
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