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|What is a Japanese Candlestick?|
A candlestick chart is a style of bar-chart
used primarily to describe price movements of a security (finance),
derivative, or currency over time.
Candlestick charts are said to have been developed in the 18th century by legendary Japanese rice trader Homma Munehisa. The charts gave Homma and others an overview of open, high, low, and close market prices over a certain period. This style of charting is very popular due to the level of ease in reading and understanding the graphs. Since the 17th century, there has been a lot of effort to relate chart patterns to the ldata points instead of one. The Japanese rice traders also found that the resulting charts would provide a fairly reliable tool to predict future demand.
Candlestick chart topics
Candlesticks are usually composed of the
body (black / white) or ( Green / Red ), and an upper and a lower shadow
(wick). The wick illustrates the highest and lowest traded prices of a
security during the time interval represented. The body illustrates the
opening and closing trades. If the security closed higher than it opened,
the body is white or unfilled, with the opening price at the bottom of the
body and the closing price at the top. If the security closed lower than
it opened, the body is black, with the opening price at the top and the
closing price at the bottom. A candlestick need not have either a body or
Green bodies show increased buying pressure and Red bodies show increased selling pressure.
A long body has a very long
body when compared with other recent candles.
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