The main difference between the old "bar chart" method, which shows open-high-low-close prices for a given time period, the Candlesticks show the distance between the open and the close as a cylinder, or "fatted line." If the closing price of the day is higher than the opening price, then the "fatted line" is left blank, or "white." If the closing price of the day is lower than the opening price, then the "fatted line" is filled in, or made "black."
The presentation is highly intuitive. The viewer understands at a glance the psychology which drove the market that day. It is especially revealing when prices are shown in Candlestick fashion in real-time data delivery, so that, literally, a "moving picture" unrolls right before the viewer's eyes.
Over the centuries since, various Indicators to accompany raw bar chart price action were developed in the Western world. They are especially adept in uncovering hidden meaning in price action. The introduction of the Candlesticks over the past several decades has changed nothing in that regard. In point of fact, the Indicators and the Candles mutually reinforce each other and make for a better financial analytical experience.
Beyond the Indicators, other devices and approaches have been formulated which go even further in lending additional force to the credibility of the Candles and Indicators together.
What every trader and investor seeks is certitude. Absolute certitude is not attainable; but what we can do is to increase the probability of the outcome of a trade by using the best tools available. The Candlesticks are one such tool; and the enhancements which have come along since the time of their invention should be availed of too.
[expert=William_Kurtz]
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