Candlestick

Japanese candlesticks are a popular charting technique used in the analysis of financial markets. They were first developed by Japanese rice traders in the 18th century and have since become a widely used tool in technical analysis.



A Japanese candlestick chart consists of individual candlesticks that represent the price action of a security over a specific time period. Each candlestick is made up of a body and two shadows, also known as wicks. The body of the candlestick represents the range between the opening and closing prices for the period, while the shadows represent the high and low prices for the period.



Candlesticks come in different colors, with green or white bodies representing an increase in price and red or black bodies representing a decrease in price. The length of the body and the size of the shadows can also provide additional information about the price action. For example, a long white candlestick with short shadows may indicate strong buying pressure, while a long black candlestick with long shadows may indicate strong selling pressure.



Japanese candlesticks can be used on their own or in combination with other technical analysis tools to help traders identify potential trading opportunities. They can also be used to confirm trend changes or the strength of a trend.



Overall, Japanese candlesticks provide valuable information about the price action of a security and are a useful tool for traders looking to make informed decisions.