The History of Candlestick Charting

The origins of candlestick charting  dates back to the year 1700 when a rice trader named Munehisa  Homma  who hailed from a rice trading community. Homma took over his father’s  rice trading business and continued his business in the Japanese town of Sakata

Homma studied the rice trading with interest and found a novel art of predicting the price of rice. He took into consideration the supply and demand conditions which played a major part in rice trading. He also studied the trading psychology of traders and incorporated into his method. These studies led to the birth of Candlestick charting. This system was hugely successful and Homma became an authority in candlestick system of trading.

 The basic candlestick consists of  a body, Lower and Upper shadows. The color of the body indicates the bullishness or the bearishness of the stock. When the price closes above the opening price the candle is called a bullish candle and is indicated by black or green color. When the price closes below the opening price the candle becomes a bearish candlestick and it is indicated by black or red color. The upper shadow’s length can vary between short and long depending upon the data. There may be candlestick, which does not have an upper shadow. The same could be said for the lower shadow. The upper shadow of the candlestick denotes the action of sellers and the lower shadow of the candlestick indicates the buyers activity, The size of the candlestick body plays the most important part of the candle pattern. The size of the candlestick body can indicate the general activity of the traders. It stands as an indicator that can point towards inactivity to extreme volatility. Depending on the size and the position it takes in a candlestick chart pattern, the body can be interpreted with different meanings.

The candlestick chart pattern can be applied in multiple time frame. Interpretation of the candlestick pattern can be based upon a single candle or in association with other accompanying candlestick patterns. A three candlestick pattern can emit a stronger signal than a single  candle pattern formation.

I would like to dedicate this entire web site for candlestick charting and candlestick chart related posts, in this site my objective is to write various candlestick pattern formations and its relevance to the stock market.

  The candlestick chart pattern can be applied in multiple time frame. Interpretation of the candle can be based upon a single candle or in association with other accompanying candle patterns. A three candle pattern can emit a stronger signal than a single  candle pattern formation.

I would like to dedicate this entire web site for candlestick charting and chart related posts. In this site my objective is to write various candlestick pattern formations and its relevance to the stock market. 

I hope the contends of this site will be informative, useful and enjoyable.