Candlesticks are the Japanese equivalent of bar charts that display the relationship between the opening price, closing price, highest price, and lowest price of a financial instrument.

The relationship between the opening and closing price is considered vital information and indicates either buying or selling pressure.

The body of the candle also gives good visual information on trading activity; the longer the body of the candlestick, the more intense the buying or selling pressure.

On the other hand, short candlesticks indicate little price movement and represent consolidation.