Japanese candlestick charting techniques has helped thousands of insitutional and retailer traders from all over the world to predict early signal of trend reversal ahead others and to maximize their profit potential.
Japanese candlestick charting techniques can be used together with Western techniques like Bollinger Band, Stochastic, RSI, ADX, MACD, Moving Averages and Elliot Waves which will greatly improve your trading profit potential and to reduce your risk exposure in the market.
With candlestick charting techniques, early signal of trend reversal is clearly revealed which you will not find it in traditional bar charting techniques.
70 Japanese candlestick charting patterns are featured in this website that provides a better understanding of each individual candlestick patterns with detailed explaination.
Japanese candlestick charting patterns can be applied in stocks, futures, forex, commodities and options market which comprises of 4 groups namely, bullish candlestick reversal patterns, bearish candlestick reversal patterns, continuation candlestick patterns and consolidation candlestick patterns.
Introduction
The Japanese originally developed this method of technical analysis to analyze the price of rice contracts in the early 1700s.
Among the first and the most famous people in Japan to use past prices to predict future price movements was legendary Munehisa Homma. He accumulated a huge fortune trading in the rice market during the 1700s.
The Japanese candlestick charting technique was later popularized by Steve Nison in year 1991 and his work has been recognized as the leading expert on their interpretation.
Japanese candlestick charting patterns provide candlesticks chart analysis for stock, futures, forex, commodities, options to predict market psychology and trend.
Candlestick charting technique are now widely used by traders in the stock, futures, forex, commodities and options market.
Candlestick charts clearly display the open, high, low, and closing prices much clearer than the modern-day bar-chart, but in a manner that extenuates the relationship between the opening and closing prices.
Candlestick form patterns if properly translated, gives wise traders an great insight into the psychology of the market. Technicals analysis in candlestick charts are the only way to measure the emotional component of the market. Such candlestick patterns reveal the level of fear, greed and confusion of the market.
Each candlestick represents one period (e.g. day) of data. The figure below displays the elements of a candlestick:
The interpretention of candlestick charts reflects the characteristic of the candlesticks in form of patterns.
The candlestick charting technique can be used alone or with combination of other technical analysis indicators. Candlestick charting technique provide the price clues which alerts technical analyst about the shift in market psychology and trend.
Technical analyst watch for price clues that can alert them to a shift in market psychology and trend.
Japanese candlestick charting technique works since 1700s and indeed it still work in the present financial market.
Some Common Candlestick Patterns
Doji |
Gravestone Doji |
Spinning Top Doji |
Spinning Top |
Shooting Star /
Inverted Hammer |
Hanging Man / Hammer |
Rickshawman
(Long Legged Doji) |
Short (Session) Candle |
Long (Session)
Candle |
Marubozu * |
Opening Marubozu |
Closing Marubozu |
* A Marubozu is known as shaven top or bottom candlestick. A closing marubozu does not display any shadow at its closing end of the candlestick. An opening marubozu does not display any shadow at its opening end of the candlestick.
