Jermaine McGruder – The STRAT: Execution Basics

The candlesticks are similar to bar charts. They show the market’s open and close on a particular timeframe. Each candle has four components, the open, close, body, and the wick.

The Body is the solid area of the candle. In this diagram, notice that the open and the close start in different places. The green candle opens at the bottom, and the red candle opens at the top. The wick is the thin area of the candle.

In other trading systems they do not consider the wicks, only the body. In the Strat course we count the wicks. The price traded there. Someone got stopped out there.

We will be using this basic knowledge, and incorporate it with the Strat Scenarios in the next lesson. For now, understand that the green, and red candles have different open, and close areas. Green candles move up on the chart, and red candles move down. The color of the bar matters. It’s a quick representation of what the institutional buyers are doing. Are they hitting the bid, or the ask?

The Bid refers to the highest price a buyer is willing to pay to purchase a stock, or an option.