What does a Japanese candlestick comprise of?

'The most endowed' candlesticks have a body and two wicks. The lines above and below the candlestick are called 'shadows' or 'wicks' while the rectangles are called 'bodies'.

Candlesticks are formed using the opening price, the highest price, the lowest price and the closing price. Each candlestick relates to a particular period of time, e.g. 5 minutes (5M), 4 hours (4H), one day (1D), etc. So when we say 'opening price' we mean the earliest bid price for the time period represented by the candlestick, while 'lowest price' would be, of course, the lowest bid price reached during the candlestick's period, and so on and so forth.

Forex Japanese candlesticks

The longer the body of a bullish candlestick, the heavier the pressure exerted by the bulls (buyers) on the bears (sellers). In other words, the bulls beat the heck out of the bears. Conversely, the longer the body of a bearish candlestick, the heavier the pressure exerted by the bears (sellers) on the bulls (buyers). Whether the pressure (or impulse) is bullish (buyer-driven) or bearish (seller-driven) of course depends on the color of the candlestick. On your trading platform you are able to change the default colors as you wish.

There are also those (quite rare) candlesticks that do not actually resemble candles - they have neither a body nor a wick, or rather the body and the wicks have merged together and formed a dash. This means that there was no change in the price over the period represented by the dash.

Forex dash

This is actually a type of doji. More about dojis on the next page.