| History of Japanese candlestick charting can be | | | | below and above the real body indicates the |
| traced back to the eighteenth century. A Japanese | | | | extreme low or high prices. To a Japanese |
| trader of a speculative market known by the name | | | | candlestick chart-analyst, the open and closing prices |
| Munehisa Homma first propounded it. He made many | | | | are of utmost significance and therefore special |
| successful winning trades with the help of his new | | | | attention is given to them. Whether the closing price |
| candlestick analysis. Candlestick charts usually shows | | | | is higher or lower than the opening price is easily |
| the open, close, high or low for a security each day | | | | distinguished by simply glancing at a candlestick chart. |
| of a particular period. In format, it has similarity with | | | | No introduction to Japanese candlestick chart is |
| that of a bar chart. However, its specialty is that it | | | | complete without a mention of different |
| extenuates the relation between opening and closing | | | | terminologies involved in this method. When the |
| prices. | | | | opening price is above the closing price the |
| A shadow or a wick indicates the price range of the | | | | candlestick chart is usually referred to as the black |
| day. When the opening price is below the closing | | | | candlestick while on the other hand when the opening |
| price and the body is usually white or green. | | | | price is lower than the closing price it is called white |
| However, in the opposite case, the body is filled with | | | | candlestick. A candlestick chart that is devoid of any |
| black or red color. Japanese candlestick chart is a | | | | upper shadow, it is called the shaven head |
| useful commodity price chart that is very easy to | | | | candlestick. Similarly, the candlestick chart with no |
| learn. Candlestick charts bring a different perspective | | | | lower shadow is called the shaven bottom. |
| on the table. They are usually more visually attractive | | | | Candlestick charts can be used by the traders to |
| and the information relating to prices are much easier | | | | show double tops and bottoms, heads and shoulders |
| to grasp. | | | | etc. However, while viewing candlestick reversal |
| Visual attractiveness is one of the major advantages | | | | patterns the background of its past activity must be |
| of candlestick charts. A candlestick chart shows the | | | | kept in mind. Candlesticks apparently alike might be |
| open, low, high, and the closing prices within a | | | | quite different in meaning due to differences in the |
| particular period like a standard two-dimensional bar | | | | background of their previous trends and formations. |
| chart. | | | | For being a successful trader of the speculative |
| For the proper analysis of candlestick charts, it is | | | | market, the traders require assistance of some |
| important that you know about the components that | | | | trading tools and a clear knowledge of the |
| make it. In a candlestick chart, the body is usually | | | | candlesticks if effectively applied goes a long way to |
| referred to as the real body and it signifies open and | | | | help the trader to make profitable speculations and |
| closing price ranges. A narrow vertical line that lies | | | | thus excel in his trade. |