Candlestick trading is a method of analyzing price movements in financial markets,

such as stocks, forex, or commodities. It originated in Japan centuries ago and has
become widely used by traders around the world.

In candlestick trading, price movements are represented by candlestick charts,

which display the open, high, low, and close prices for a given time period. Each
candlestick typically represents one time period, such as one day or one hour,
depending on the chosen timeframe.

A candlestick consists of a rectangular body and two wicks (or shadows) extending
from the top and bottom of the body. The body represents the difference between the
open and close prices for the period, with different colors indicating whether the
closing price was higher or lower than the opening price. For example, a green (or
white) candlestick indicates that the closing price was higher than the opening
price, while a red (or black) candlestick indicates the opposite.

Candlestick patterns are formed by the arrangement of multiple candlesticks on a

chart and can provide insights into potential future price movements. Traders use
these patterns to identify trends, reversals, and market sentiment, and they often
combine candlestick analysis with other technical indicators to make trading
decisions.

Some common candlestick patterns include the hammer, doji, engulfing pattern, and
shooting star, among others. Each pattern has its own significance and
interpretation, which traders learn to recognize through study and experience.