Japanese Candlesticks are the oldest form of technical analysis. It is a system that has been used since the 1700s to trade. In the beginning, it was used to trade and analyze rice trading. Over the centuries it has become used for many other analyses including but not limited to securities, options, and Forex.
Japanese candlestick charts display market sentiment like other charts but most would agree you get a little more insight from a candlestick chart. Basically you measure 2 parts of a candlestick, the body, and the wicks. The body can be either full or hallow, and the wick or shadows, can be long or short, or not present at all. All tell a story.
The top of the wick / shadow marks your high for the session. The low wick, below the real body marks the sessions low. The open on a hallow body is marked by the bottom of the body, and the high is the top. A full candlesticks marks its open at the top, and its bottom is the close of the session. So if price closes higher than it opens, you get a hallow candlestick. If price closes lower than it opens you get a full candlestick. (See below.)[I:0:J]
Candlestick patterns are not only more easy to read, they are also more intuitive once you get the hang of reading them. You see there are patterns with candlesticks you will soon learn to easily recognize, combine this with the intuitiveness and you have yourself a method for assessing price far superior to any other.
All candlesticks have a body and a wick or shadow, unless the open close high and low are equal to each other in which case you would have a little dash and that's it. A white body is an empty body, and a black one is a full body. The empty/white body represents a close greater than the open, and a black/full body represents a close less than the open. The size of the body represents the distance between the open and close.
There are also candlesticks with full bodies and no wicks/shadows. These should be noted and have a name they are called Marubozu's. The can be black or white (full / empty) and they appear when the open and close of the session are equal to the high and low. With the white/empty candlestick your high is equal to your close. With the black/full your low is equal to your close.
A long or short shadow with a short body are called spinning tops. Spinning tops represent indecision. The short body indicates that there was little change in the trading and the long shadows indicate there was a lot of activity with both bulls and bears. However it also indicates that neither buyer nor seller could get the upper hand, resulting in somewhat of a standoff. [I:1:J] - 15224
Japanese candlestick charts display market sentiment like other charts but most would agree you get a little more insight from a candlestick chart. Basically you measure 2 parts of a candlestick, the body, and the wicks. The body can be either full or hallow, and the wick or shadows, can be long or short, or not present at all. All tell a story.
The top of the wick / shadow marks your high for the session. The low wick, below the real body marks the sessions low. The open on a hallow body is marked by the bottom of the body, and the high is the top. A full candlesticks marks its open at the top, and its bottom is the close of the session. So if price closes higher than it opens, you get a hallow candlestick. If price closes lower than it opens you get a full candlestick. (See below.)[I:0:J]
Candlestick patterns are not only more easy to read, they are also more intuitive once you get the hang of reading them. You see there are patterns with candlesticks you will soon learn to easily recognize, combine this with the intuitiveness and you have yourself a method for assessing price far superior to any other.
All candlesticks have a body and a wick or shadow, unless the open close high and low are equal to each other in which case you would have a little dash and that's it. A white body is an empty body, and a black one is a full body. The empty/white body represents a close greater than the open, and a black/full body represents a close less than the open. The size of the body represents the distance between the open and close.
There are also candlesticks with full bodies and no wicks/shadows. These should be noted and have a name they are called Marubozu's. The can be black or white (full / empty) and they appear when the open and close of the session are equal to the high and low. With the white/empty candlestick your high is equal to your close. With the black/full your low is equal to your close.
A long or short shadow with a short body are called spinning tops. Spinning tops represent indecision. The short body indicates that there was little change in the trading and the long shadows indicate there was a lot of activity with both bulls and bears. However it also indicates that neither buyer nor seller could get the upper hand, resulting in somewhat of a standoff. [I:1:J] - 15224
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Japanese candlestick patterns are the best way to read a price chart. The candlestick patterns themselves allow you to recognize immediately what the current state of price action really is in all time frames. If you want to master these revealing patterns visit our website and download our free course at http://www.candlestickgenius.com
