This Element is an excerpt from Trading with Candlesticks: Visual Tools for Improved Technical Analysis and Timing (9780131380943) by Michael C. Thomsett. Available in print and digital formats.

The simple introduction to candlestick charting: what candlesticks are, what they tell you (and don't tell you), and how to use them to invest more successfully.

Candlestick charting combines all the needed features of daily stock movement: opening and closing, breadth of the day's trading, upward or downward price movement, and high/low prices reached during the day. This is achieved through a combination of shape and color. Candlesticks are easy to understand and are actually quite simple in what they revealÖ.