Whiskers

What Are Whiskers?

Whisker is the terminology used to describe the vertical lines that stretch above and below the core boxes or bars on a graph representing a financial instrument, asset, or security. These charts are sometimes known as candlestick charts, and the lines can also be portrayed as wicks. 

Every candlestick bar or chart segment will usually have a solid box (candlestick body) formed by the starting and closing prices and also two whiskers/wicks that stretch above and below the core box. 

The whiskers show the highest as well as lowest points recorded within that time period. If somehow the box and whiskers are red (or black), the underlying asset's price declined throughout that time period, whereas if the box and whiskers are green, the price grew during that time period. 

The whiskers represent the upper and lower limits of the underlying asset's price throughout the time segment, whilst the box or candle represents the asset's opening and closing price during that period. Small whiskers suggest that the highest/lowest price is near to the opening/closing price, but big whiskers show that the market had higher levels of volatility, moving farther away from the opening/closing values.

An Illustration of the Concept of Whiskers

For instance, if we are looking at a chart with a 10-minute segment per candle and the price opens at $5, falls to $1, rises to $15, and closes the 10-minute timeframe at $10, we'd observe a green candle with a whisker ranging from $1 (lowest possible price during the period) to $5 (opening price), a solid green body candle ranging from $5 (opening price) to $10 (closing price), and a whisker ranging from $10 (closing price) to $15. (the highest price). As a result, whiskers are a helpful way to gauge an asset's volatility across time, above and beyond the timeframe's opening and closing prices.