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Trading glossary

Candles words

48 words, each explained first as you would tell a ten-year-old.

1. bearishExpecting prices to fall, or showing that sellers are winning.
2. bearish engulfingTwo candles: a green one, then a bigger red one whose body swallows it, a hint that sellers have taken over.
3. bearish haramiA small candle that fits inside a big green one before it, a sign that buying is slowing down.
4. bearish marubozuA full red candle with no thin lines: sellers were in charge from the first moment to the last.
5. bodyThe thick part of a candle, showing where price started and where it finished during that time.
6. bullishExpecting prices to rise, or showing that buyers are winning.
7. bullish engulfingTwo candles: a red one, then a bigger green one whose body swallows it, a hint that buyers have taken over.
8. bullish haramiA small candle that fits inside a big red one before it, a sign that selling is slowing down.
9. bullish marubozuA full green candle with no thin lines: buyers were in charge from the first moment to the last.
10. candlestickA tiny picture of price for one stretch of time, showing where it started, its highest and lowest points, and where it finished.
11. closeThe last price of a candle: where price finished when that stretch of time ended.
12. confirmationWaiting for the next candle to agree with a signal before acting, like checking twice before crossing a road.
13. dark cloud coverTwo candles after a rise: a big green one, then a red one that opens higher but falls below the middle of the green body.
14. dojiA candle where price finished almost exactly where it started, like a tug of war that ended in a tie.
15. dragonfly dojiA candle shaped like a T: price dived far down, then climbed all the way back to where it started.
16. engulfing patternTwo candles where the second candle's body is so big it swallows the whole body of the first.
17. evening starThree candles after a rise: a big green one, a small one, then a big red one, like the sun setting on the climb.
18. gravestone dojiA candle shaped like an upside-down T: price shot far up, then fell all the way back to where it started.
19. green candleA candle that finished higher than it started, so buyers pushed price up during that time.
20. hammerA candle shaped like a hammer: a small top and a long line hanging below, showing price dropped and then bounced back up.
21. hanging manA hammer-shaped candle that appears after a rise instead of a fall, where it can warn that the climb is tiring.
22. haramiA small candle that fits inside the body of the big candle before it, showing the big move has paused.
23. highThe highest price reached during a candle or a stretch of time.
24. indecisionWhen buyers and sellers are evenly matched and price ends a candle near where it started.
25. inside barA candle whose whole range fits inside the candle before it, like a small box inside a bigger box.
26. inverted hammerA candle with a small bottom and a long line sticking up, found after a fall: buyers tried to push up but got pushed back.
27. locationWhere a signal shows up on the chart, like at a floor or a ceiling. The same shape can mean different things in different places.
28. long-legged dojiA doji candle with very long lines on both sides, showing price swung far up and far down but ended where it started.
29. lowThe lowest price reached during a candle or a stretch of time.
30. lower wickThe thin line below a candle's body, showing how low price went before coming back up.
31. marubozuA candle that is all body and no thin lines, showing one side was in charge from start to finish.
32. midpointThe middle of a candle's body, halfway between where it opened and where it closed.
33. morning starThree candles after a fall: a big red one, a small one, then a big green one, like sunrise after night.
34. mother barThe bigger candle that a smaller candle fits inside, like a big box holding a small box.
35. OHLCShort for open, high, low and close: the four prices every candle shows.
36. openThe first price of a candle: where price started when that stretch of time began.
37. piercing lineTwo candles after a fall: a big red one, then a green one that opens lower but climbs above the middle of the red body.
38. rangeHow far price moved from its lowest to its highest point during a candle or a stretch of time.
39. red candleA candle that finished lower than it started, so sellers pushed price down during that time.
40. rejectionWhen price pushes to a level but gets shoved back, leaving a long thin line on the candle.
41. shooting starA candle with a small bottom and a long line sticking up, found after a rise: buyers pushed up but sellers shoved price back down.
42. spinning topA candle with a small body in the middle and lines on both sides, showing buyers and sellers ended in a tie.
43. three black crowsThree big red candles in a row after a rise, each closing lower, showing sellers marching in.
44. three white soldiersThree big green candles in a row, each closing higher, like soldiers marching up.
45. tweezer bottomTwo candles next to each other that stop at the same low after a fall, like a floor that held twice.
46. tweezer topTwo candles next to each other that stop at the same high after a rise, like a ceiling that held twice.
47. upper wickThe thin line above a candle's body, showing how high price went before coming back down.
48. wickThe thin lines above and below a candle's body, showing the highest and lowest prices of that time.