Japanese candlesticks are one of the most popular technical analysis tools among traders in the financial markets, and are used to provide comprehensive information about price movements over a certain period of time. Their origins date back to Japan in the 17th century, where they were developed by the Japanese trader Munehisa Homma, who was trading in the rice market.
Date of establishment:
Japanese candlesticks were first used in the rice market in the Japanese city of Sakata.
Munhisa Homma noticed that psychological factors and supply and demand play an important role in price movements, which led him to develop a system to record price movements daily.
Japanese candlesticks later evolved into a globally recognized method of analysis after being introduced to the West through technical analysis books in the late 20th century.
Japanese candle structure:
A candle consists of a main body and upper and lower shadows.
Body: Represents the difference between the open and close price.
Upper and lower shadows: reflect the highest and lowest price during the time period.
If the close is higher than the open, the body is usually green or white (a bullish signal), and if the close is lower than the open, the body is red or black (a bearish signal).
The importance of Japanese candles:
Candlesticks provide visual information that helps traders quickly understand market movement.
Provides signals about market trends, such as reversal and continuation patterns.
It is widely used to analyze financial markets such as stocks, cryptocurrencies, and forex.
Conclusion:
Japanese candlesticks are not just a technical analysis tool, but also a reflection of the philosophy of understanding human psychology in the financial markets. Through their long history and diverse uses, they have become a staple in modern trading strategies.