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Bloomberg Visual Guide to Candlestick Ch... > Chapter 3: Candlesticks and Their At... - Pg. 15

C H A PTE R Candlesticks and Their Attributes C andlestick attributes features and trend indicators found on every candlestick. The value to this form of charting is found in the fact that all pricing data for a session is easily identified at first glance and that view- ing a series of sessions helps traders easily identify mo- mentum, direction, and reversal. The attributes of every candlestick are defined in three areas: 1. Opening and closing price. Each session's open- ing and closing prices are found at the horizontal borders of the rectangular box for the session. The opening price is at the bottom of a white candlestick or at the top of a black candlestick. The closing price is at the top of a white candlestick or at the bottom of a black candlestick. The rectangular box is called the real body. When the opening and closing price are identical or very close, the real body is replaced by a horizontal line. This type of formation is among the most revealing of candlestick sessions and is called a doji (in Japanese, "doji" means "mistake"). 2. Trading range from high to low. The full trading range for each session is represented by the upper and lower extensions from the real body. These are called the upper shadow and lower shad- ow (also called tails or wicks). The complete lack of shadow has significance in many candlestick formations, and an exceptionally long shadow also reveals failed momentum by buyers (long upper shadow) or sellers (long lower shadow), signaling potential reversal of the existing trend. 3. Direction of movement. One of the most pow- erful visual attributes of candlestick charting is the ability to immediately see the overall direction that price is moving. While line charts and OHLC charts reveal direction through the shape and duration of each session, the candlestick short-term trend is easily spotted. A white candlestick reveals that the session moved upward, and a black candlestick re- veals a downward-moving session. KEY POINT: Every candlestick provides price information in three major areas: opening and closing prices, trading range, and direction. 15