Whats a candle?

When you talk to people about investments, market, charts or any company, they reflect in their mind this typically image of a linechart, this is because in everyday news when they talk about the stock markets, oil, gold, silver or any other, they show up this linechart (or mountain) because is easier to recognize where is it going, in most cases this is not reflecting the true image of whats probably going to happen, let me explain:

A linechart: draws together with a line all closing values of any symbol across the chart.

A bar chart: draws a small bar that has much more information than a line chart.

A candlestick chart: draws what we call a candle that is no more than a variation of the bar but with more info than a bar chart.

Lets take a look

Regarding the drawing of the bar and candle we can say:

Now lets look at all the information given by the candle:

Note that there are two colors for a candlestick, i have to mention that i use black and white but in your trading platform you will be able to give the candle any color you want, white candle are bullish period and black candles are for bearish  period.

If you are thinking yourself, there's not much differnce between candles and bars, because bar's also show the maximum and minimum of the day, well the diference comes in the shape of the candle, all kinds of variation in the size of the real body, the shadow, even if there's no shadow, the candle will have a meaning for all of this.

Soon i will have a small a series of candle patterns, the most important from 1 to 3 candle set ups and you will see how easy it is to read a chart, i call it "listening the market".

Thanks