Understanding price movements of a share

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Movements of a share/stock

When the market opens, any share/stock will have a opening value for the day. This value will fluctuate during the market hours i.e., candles/graphs, etc. will be shown for the up/down/sideways movements of the price. We see a green (bullish) candle when the price moves up and a red (bearish) candle when the price moves below in comparison to the previous candle. The color of the candles depends on the closing (Close) value of the candles and it decides whether a candle is bullish (green) or bearish (red).


Up Movements- the price increases
Down movements- the price decreases
Sideways movements- the price neither increases nor decreases. The price keeps moving in a range.

Examples-






In the examples above, we can see that each red candle means the price of the share went down and the green candle indicates that the price has gone up when compared to the previous candle.

If we set the time frame to 1 hour then each candle will show the changes in value/price of the stock on 1 hour basis. It means each candle is of 1 hour and it will be red or green depending on the closing value of the candle. Similarly, we can set the time frame to other durations of our choice (1min, 2min, 3min, 5min, 1hour, 4hour, 1day, 1week, etc.) and accordingly we’ll see one candle each for our selected time frame.

For example, If we are viewing a chart of total 30 hours duration and set our time frames as indicated below then the number of candles we will see is -


Here, we can see that based on our time frame the number of candles will change and accordingly we will see different patterns/formations on our charts. These patterns combined with other factors help us to draw inferences and take trades.


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