A candlestick is a graphical representation of the price action of a trading asset. It allows chartists and traders to visualize the open, high, low, and closing prices within a specific time period.
While candlestick charts may also be used for analyzing other types of data, they were initially created as a tool that facilitates the analysis of financial markets. The concept of candlesticks is said to originate from Japanese traders back in the 17th century.
For instance, a 1-hour chart consists of multiple candlesticks, each one illustrating a 1-hour market movement. Each candlestick displays the opening and closing prices (body of the candlestick), as well as the high and low price points (long lines above and below the body, also known as wicks).