What is a Japanese Candlestick

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What is a Japanese Candlestick

If you are new to the stock trading or forex business, then you must know about what is a Japanese candlestick. As the name implies, this candlestick or candle rod was discovered by Munehisa Homma (1724-1803) who was a trader of rice from sakata, Japan, who traded at the Ojima market in Osaka during the Tokugawa Shogunate. And thanks to his expertise this made him the Samurai of Honor in Japan in his time.


Munehisa Homma (Mr Candlestick)

Okay, what is a candlestick

To facilitate learning candlesticks, we need a candlestick image itself. And keep in mind that candlesticks can be used to analyze prices at any time frame.

If the price closes above the opening price (Open) then the candlestick is green or white and said that the price is bullish.This Japanese candlestick is formed by the opening price (Open), the lowest price (Low), the highest price (High), and the closing price (Close).

  1. If the price closes below the opening price (Open) then the candlestick is red or black and said that the price is bearish.
  2. Colored candlestick parts are called “Real Body” or “Body”.
  3. The lines below or above “Real Body” are called “Shadow” or shadows that describe the range of the highest (High) and lowest (Low) prices during the trading session.
  4. The peak point of the line under “Body” or “Lower Shadow” is the lowest price (Low).
  5. The top point of the line above “Body” or “Upper Shadow” is the highest price (High).

By using a candlestick we can easily determine whether the trend is bearish or bullish just by looking at it.

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