What Are Japanese Candlesticks?
By: Lisa
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An ancient form of predicting trends in trading markets, adapted for Forex Trading.
A Japanese Candlestick chart is a price plotting technique that offers a quick and easy method of identifying the price movement of a currency pair.
Japanese candlestick charts have been around for hundreds of years. As a matter of fact, they are attributed to a Japanese Rice Trader named Homma Munehisa, back in the 18th century. Because of its longevity, wouldn't that tell you something about how useful and accurate candlestick charting is? Even though its been around for hundreds of years it's still hard to find anyone, except the experts, who understand it well. Most Forex traders use candlesticks for price predictions because it quickly shows the strength and action of the bulls and bears over the price of a currency pair.
There are two primary ways to use Japanese Candlesticks. The first way is to read the data in an individual candlestick. The second method is a pattern identification process of using Japanese candlesticks in particular combinations. Both methods provide a huge amount of useful information to the Forex trader.
Japanese candlestick charting doesn't take months or years to master. With practice, the patterns can be memorized in a few short weeks and you will begin to see the patterns reveal themselves on the charts at a glance. With a Japanese candlestick chart and technical analysis, the patterns stick out like a hundred dollar bill in a change jar. You will no longer have to spend as much time analyzing a single market. Japanese Candlesticks and a Japanese chart work in ANY market over ANY time frame, and since it takes much less time to study a chart in candlestick form you can cover more charts in less time. How's that for a time-saver?
Japanese candlestick charting is relatively easy. It doesn't involve complicated formulas or extensive calculations to master the method. It is also extremely powerful and accurate. Used along side other market indicators you can build a method that works for you and potentially helps you be successful. Will you profit on every trade? No, of course not. Not unless you are extremely lucky. However, a Japanese Chart and Japanese Candlesticks can help you be successful and profit more often than not. When read correctly, a Japanese chart and Japanese candlesticks can even show you investor sentiment for a given market.
