History[ edit ] The name "candlestick" derives from Candlestick purpose of the device as a place to secure or "stick" a burning candle; candlesticks have a cup or a spike or both in some designs to keep the candle in place. Although electric lighting has phased out candles in many parts of the world, candlesticks and candelabra are still used in some Western countries homes as a decorative element or to add atmosphere on special occasions. Before the proliferation of electricity services, candles were brought into the bedroom using chambersticks, which were shorter than ordinary candleholders and furnished with a wide pan to catch the wax drippings.
Candlestick Charts History of Candlestick Charts The creation of candlestick charts is widely credited to an 18th century Japanese rice trader Munehisa Homma.
His prowess at gaming the rice trading markets was legendary. It is believed his candlestick methods were further modified and adjusted through the ages to become more applicable to current financial markets. Candlesticks have become a staple of every trading platform and charting program for literally every financial trading vehicle.
The depth of information and the simplicity of the components make candlestick charts a favorite among traders. The ability to chain together many candlesticks to reveal an underlying pattern makes it a compelling tool when interpreting price action history and forecasts.
How Candlestick Read Candlestick Charts Basic Candle Formation A candlestick is composed of three parts; the Candlestick shadow, lower shadow and body. The body is colored green or red. Each candlestick represents a segmented period of time.
Candlestick candlestick data summarizes the executed trades during that specific period of time. For example a 5-minute candle represents 5 minutes of trades data.
There are four data points in every candlestick: The open is the very first trade for the specific period and the close is the very last trade for the period. The open and close is considered the body of the candle. The high is the highest priced trade and low is the lowest price trade for that period.
How to Read a Candlestick The high is represents by a vertical line extending from the top of the body to the highest price called a shadow, tail or wick.
|What is a 'Candlestick'||Introduction to Candlesticks History The Japanese began using technical analysis to trade rice in the 17th century. While this early version of technical analysis was different from the US version initiated by Charles Dow aroundmany of the guiding principles were very similar:|
|candlestick||A candlestick's shape varies based on the relationship between the day's high, low, opening and closing prices. Candlesticks reflect the impact of investor sentiment on security prices and are used by technical analysts to determine when to enter and exit trades.|
|BREAKING DOWN 'Candlestick'||In the s, a Japanese man named Homma discovered that, while there was a link between price and the supply and demand of rice, the markets were strongly influenced by the emotions of traders. Candlesticks show that emotion by visually representing the size of price moves with different colors.|
|Candlestick - Wikipedia||Candlesticks reflect the impact of investor sentiment on security prices and are used by technical analysts to determine when to enter and exit trades.|
|Introduction to Candlesticks History The Japanese began using technical analysis to trade rice in the 17th century. While this early version of technical analysis was different from the US version initiated by Charles Dow aroundmany of the guiding principles were very similar:|
The low of the candle is the lower shadow or tail, represented by a vertical line extending down from the body. If the close is higher than the open, then the body is colored green representing a net price gain.
If the open is higher than the close, then the body is colored red as it represents a net price decline. Candlestick Chart Patterns Every candlestick tells a story of the showdown between the bulls and the bears, buyers and sellers, supply and demand, fear and greed.
It is important to keep in mind that most candle patterns need a confirmation based on the context of the preceding candles and proceeding candle.
Many newbies make the common mistake of spotting a single candle formation without taking the context into consideration.
These patterns tend to repeat themselves constantly, but the market will just as often try to fake out traders in the same vein when the context is overlooked. Candlestick charts tend to represent more emotion due to the coloring of the bodies. The following are some of common candlestick reversal patterns.
Hammer Candlestick Hammer Candlestick The hammer is a bullish reversal candlestick. It is one of the most if not the most widely followed candlestick pattern. It is used to determine capitulation bottoms followed by a price bounce that traders use to enter long positions.
A hammer candlestick forms at the end of a downtrend and indicates a near-term price bottom. The hammer candle has a lower shadow that makes a new low in the downtrend sequence and then closes back up near or above the open.
The lower shadow also called a tail must be at least two or more times the size of the body. This represents the longs that finally threw in the towel and stopped out as shorts start covering their positions and bargain hunters come in off the fence.A candlestick is a type of price chart that displays the high, low, open and closing prices of a security for a specific period and originated from Japan.
Candlestick charts originated in Japan over years before the West developed the bar and point-and-figure charts. In the s, a Japanese man named Homma discovered that, while there was a. Candlestick Analysis — Check out the trading ideas, strategies, opinions, analytics at absolutely no cost!
Candlestick charts are one of the most popular chart types for day traders. Learn how to read these charts and apply them to your trading. There's no need to wait for a special event to brighten up your rooms and decorate with some candlestick candle holders.
Create a cozy atmosphere with your favorite scented candle and favorite candlestick design. Contemporary Examples. of candlestick. Candlestick Park was the scene of “The Catch,” which propelled the 49ers to their first Super Bowl victory.