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 no other form of charting can. With candlestick charts you have basically 2 moving parts. (If you will.) The real body, can be full or hallow, and the wicks or shadows can be long or short, or gone - either way, together you get a nice picture of price action today, or over a period of time.
Your highs and lows for the session are marked by the tops (high) and bottoms (low) of the wicks. Likewise a close that is greater than an open is represented by a hallow candlestick the bottom is the open, and the top is the close. A close that is less than the open is represented by a full or black candlestick. The top is the open and the bottom is the close. (See below.) [I:0:J]
Candlestick charts are considered more eye appealing and easier to understand than the ordinary bar or line chart. They are more intuitive and easier to identify immediately, and they also show price action relative to the past. (Best left for another article.)
Different body sizes represent the distance between open and close. A longer hallow body represents a nice bullish candlestick where the close is higher than the open. A longer filled or black body represents a nice bearish session / day where the close is much lower than the open. In the flip side short bodies represent a close and open relatively close to each other.
Another characteristic would be a hollow or filled body with no shadows. These are called Marubozu or black & white. A white Marubozu would occur when the open equals the low and the close equals the high. A black Marubozu would occur when the open equals the high and the close equals the low.
A spinning top is a candlestick with a short body and a long or short wick/shadow. The short body tells us that price opened and closed rather close to one another, while a long shadow/wick tells us that during the session price made its way in that direction but failed to hold its ground. This failure to "hold ground" could be a clue for price direction in the next session. [I:1:J] - 16463
Japanese candlestick charts display market sentiment like no other form of charting can. With candlestick charts you have basically 2 moving parts. (If you will.) The real body, can be full or hallow, and the wicks or shadows can be long or short, or gone - either way, together you get a nice picture of price action today, or over a period of time.
Your highs and lows for the session are marked by the tops (high) and bottoms (low) of the wicks. Likewise a close that is greater than an open is represented by a hallow candlestick the bottom is the open, and the top is the close. A close that is less than the open is represented by a full or black candlestick. The top is the open and the bottom is the close. (See below.) [I:0:J]
Candlestick charts are considered more eye appealing and easier to understand than the ordinary bar or line chart. They are more intuitive and easier to identify immediately, and they also show price action relative to the past. (Best left for another article.)
Different body sizes represent the distance between open and close. A longer hallow body represents a nice bullish candlestick where the close is higher than the open. A longer filled or black body represents a nice bearish session / day where the close is much lower than the open. In the flip side short bodies represent a close and open relatively close to each other.
Another characteristic would be a hollow or filled body with no shadows. These are called Marubozu or black & white. A white Marubozu would occur when the open equals the low and the close equals the high. A black Marubozu would occur when the open equals the high and the close equals the low.
A spinning top is a candlestick with a short body and a long or short wick/shadow. The short body tells us that price opened and closed rather close to one another, while a long shadow/wick tells us that during the session price made its way in that direction but failed to hold its ground. This failure to "hold ground" could be a clue for price direction in the next session. [I:1:J] - 16463
About the Author:
Japanese candlesticks are the choice for professional traders and anyone who wants to have the best perspective on price action, and current market sentiment. If you aren't using candlestick patterns to trade, you are absolutely missing out. To start using Japanese candlesticks now visit our website and download our free course material. http://www.candlestickgenius.com
