UK Accounting Glossary
A red candlestick is used on a candlestick chart to signify that a security/index/commodity closed lower than where it opened for a given trading period (e.g. one trading day). The components of a red candlestick consist of a rectangular box, the top of which marks the day’s opening price and the bottom of which the day’s closing price. The ends of a red candlestick will often have shadows — also called “tails” or “wicks” (i.e. the thin vertical line at either end of the body). A shadow at the top of a red candlestick indicates that the security traded higher than the open at some point during the trading day. A shadow at the bottom of a red candlestick indicates the price traded lower than the ultimate close at some point during the trading day. A red candlestick without shadows, known as a marabuzo, means a security opened at its high and closed at its low. Instead of a red candlestick, some traders prefer to chart negative trading days with a black candlestick.
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This glossary post was last updated: 6th February 2020.