the hAnDbook of technIcAl AnAlysIsvisualization of price action on the charts, especially from a distance. Real bodies
may be black or white, filled or hollow. The price ranges beyond the open and
close prices are referred to as upper and lower tails, wicks, or shadows.
the Composite Candlestick
As with standard price bars, we can also create higher time‐period or larger‐interval
candlesticks by combining the OHLC data from numerous lower time‐period or
smaller‐interval candlestick action. See Figure 14.2.
There is a simple procedure for creating larger‐interval candlesticks from a
number of smaller‐ or shorter‐interval candlesticks:
- Use the opening price (O) of the first smaller‐interval candlestick as the open-
ing of the larger‐interval composite candlestick. - Use the closing price (C) of the last smaller‐interval candlestick as the closing
price of the larger‐interval composite candlestick.
figure 14.1 The Construction of Japanese Candlesticks.
figure 14.2 The Construction of Higher Time‐Period Japanese Candlesticks.