<p><strong>Candlestick</strong> is a type of chart used in technical analysis that illustrates price action for a specific period, typically a day or hour. It shows the open, high, low, and close prices for that period, with the body (real body) representing the range between the open and close, and the wicks (shadows) showing the highest and lowest prices reached during that period.</p>
<p>Candlesticks matter because they provide valuable insights into market sentiment and can help traders identify potential trends or reversals. For instance, a bullish candlestick pattern like a 'bullish engulfing' can signal a potential trend reversal, while a bearish pattern like a 'hanging man' can indicate a potential <a href="/NewSite/encyclopedia/resistance/" class="ency-link">resistance level</a>.</p>