Introduction To The Japanese Candlesticks

The Japanese candlesticks are a graphic representation which comes from Japan.

The use of this representation would date back to the XVIII century. One of the most illustrious Japanese who used the price to foresee the movements of the rice rate is Munehisa Homma, called the “king of the markets”.

His family who was yet very wealthy turned into the East (even the world) richest family. He wrote two books about his methods by the ends of the XVIII century. The country was previously and for a long time in war so he chose a lot of military words to describe the figures done by the candlesticks (ex: “gravestones”, “three soldiers who move forward”, “night attack”). Then the Japanese traders used and perfected it until nowadays.

For a long time, the Japanese candlesticks were only used on the Japanese markets; few Westerners used them until Steve Nison published his book “Candlestick Charting Technique” in 1991.

Then the Westerner operators progressively abandoned their barcharts and chose this representation that offers supplementary possibilities. The Japanese candlesticks became more popular and nowadays, it is the more used graphic representation.

The thick part of the candlestick is called “true body” and the thin lines below and above it are called “high shadow” or “low shadow”.

The proportions of these elements define the different kind of Japanese candlesticks and they will help to define the figures that would really often favor a continuation or a reversal of the tendencies.