Japanese Candlesticks Patterns Explained
Stocks Using Candles
Brief History
Candle-sticks were developed in the 18th century by the legendary rice trader known as Homma Munehisa to give an overview of the opening, high, low & closing market stocks price over a given period of time.
They were used by the legendary rice trader to predict future market stocks prices. After dominating trading the rice market, Munehisa then eventually moved to the Tokyo exchanges where he then gained a huge fortune using this analysis. It is said that He made over a hundred consecutive winning trades.
Types of Stocks charts
There are Three types of charts used in Stocks: Line, bar & candles.
Line - plots a continuous line connecting closing stocks prices of a stocks.
Bars- displayed as sequence of OHCL bars. OHCL represents OPEN HIGH LOW and CLOSE. Opening stocks price is displayed as a horizontal dash on the left and closing stocks price as a horizontal dash on the right.
The main disadvantage of a bars is that it isn't visually appealing, therefore most traders don't use them.
Candlesticks Patterns - Japanese Candlestick Charting Techniques - these use the same price data as bar charts (open, high, low, and close). However, they in a much more visually identifiable way which resembles a candle with wicks on both ends.
How to Analyze Japanese Candlestick Charting Techniques
The rectangle part is known as body.
The high & low are described as shadows and plotted as poking lines.
The color is either blue or red
- (Blue or Green Color) - Stocks Prices moved up
- (Red Color) - Stocks Prices moved down
Most stocks trading softwares like the MT4, use colors to mark the direction. Colors used are blue or green: when the price moves upward, red: when the price moves downward.
Candle Sticks Vs. Bar Chart
When candlesticks are used it is very easy to see if the stocks price moved up or down as opposed to when a bars are used.
The Japanese Candlestick Charting Techniques also have very many formations that are used to trade the Stocks market. Japanese Candlestick Charting Techniques - candlesticks patterns have different technical analysis interpretation and the most common Japanese Candlestick Charting Techniques are:
The above Japanese Candlestick Charting Techniques and Patterns is what makes the Japanese candlesticks popular among stocks technical traders and it's why this type of analysis are the most widely used when it comes to analyzing the stock market. The analysis for these Japanese candlesticks pattern formations in stock trading is the same as that one used in stock trading - Japanese Candlestick Charting Techniques.
Drawing japanese Candles Stocks Charts on MT4 Platform
To draw these on the MT4, choose MetaTrader 4 charts drawing tools within the "MT4 Tool bar" - shown below.
To view this toolbar in MetaTrader 4 navigate to "View" Next to file at top left corner of MT4 Platform, Click "View", Then Click "Tool bars", Then check "Charts" Button. Above toolbar will appear.
Once the above tool bar, pops up you can then choose the type you want to convert to, If you want to view using the bar format, click the bar tool button key as shown above, for line format click the line tool button, for Japanese candles format click "candlesticks tool button key".
Stocks Japanese Candlesticks. Japanese Candlesticks Stocks Candlesticks Patterns - Stocks Using Candlesticks. Stocks with Candlestick - Trade Stocks with Stock Candle Pattern
