Tue. Oct 4th, 2022

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Japanese Candlestick Anatomy

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Candlesticks (also referred to as Candlestick charts) are a method of monetary chart wont to describe high, low, opening and shutting price movements of a security, derivative, or currency for a selected period. It resembles the shape of a candlestick and thus named after candlestick.

Qualities Of Japanese Candlesticks:

a. Dense
b. Packed with information
c. Indicate Market Psychology, and the emotions of buyers and sellers
d. Represent trading patterns over a brief period of your time
e. Sometimes, few days or few sessions are required
f. Can be used in the Technical analysis of currency price patterns and of equities
g. Can be used for any Forex time frame

Homma developed candlesticks that graphically displayed the character of price movements by using different colors to denote the differences. Traders can use the candlesticks to spot patterns of price action and make decisions supported the short-term direction of the costs .

As a legendary rice trader of financial instruments, Homma dominated the rice markets and became popular for discovering the candlestick charting method. When the Japanese stock market began in the 1870s, local technical analysts incorporated Homma’s candlestick methodology into the trading process. American technical analyst Steve Nison introduced the technique to the West through his book “Japanese Candlestick Charting Technique”. Japanese Candlestick charting is now a popular technical indicator that traders use to analyze financial markets.

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