The red and green candles in trading represent the direction of price movement within a specific time period. Here's a concise explanation:
- Green Candles: A green candlestick represents an increase in price during the time period it represents. The body of the candle is typically filled with green to visually indicate this upward movement. The open price is at the bottom of the body, and the close price is at the top, reflecting the price rising from the start of the period to its end12.
- Red Candles: Conversely, a red candlestick indicates a decrease in price during the specified time period. The body of the candle is usually filled with red or black to show the downward price movement. The open price is at the top of the body, and the close price is at the bottom, signifying that the price fell from the start to the end of the period12.
These color-coded candlesticks provide a quick visual representation of the price action, helping traders interpret market movements and make informed decisions based on past price behavior.