Candlestick

Just like a candle lights the way forward (at least in novels by the Bronte sisters and the like), analysts use candlestick charts to try to predict trends in financial markets. Invented by Japanese rice traders in the eighteenth century, candlestick charts pack a lot of data for multiple time frames into simple color-coded "candlesticks." They help to predict whether a price will go up or down based on things like previous opening and closing prices.

Data needed to create a candlestick chart include: the opening price, the high point, the low point and the closing price in a specific time period. There's a thick body representing the difference between the opening and closing prices, and then little lines poking out above and below to show the high and the low. It's then color coded to indicate if the closing price was higher or lower than the opening price. It will be white or green if it closed higher or black or red if it closed lower.

The chart is basically saying "the stock traveled this far during the day" (space between the opening and closing prices) "but also took these detours" (the little lines showing the high and low). They are called candlestick charts because they vaguely resemble candles, with their thick middle and their little wick-like line sticking out on top (and on the bottom...we guess that's a manufacturing error at the candle factory).

There are all kinds of fancy names for the patterns you can discern from candlestick charts. There's a "bullish engulfing pattern" at the end of a downtrend or "bearish engulfing pattern" for the end of an uptrend. How about a "harami" or "evening" or "morning" star that indicates a reversal pattern? An example of candlestick charts can be found at https://www.mql5.com/en/market/product/1311.