Review: Candlestick Charting: What Is It?
Rating: 5 out of 5
Date: 05 23, 2014
The concept of Candlestick Charting originated in Japan in the 1700’s long before the bar system was developed by the West.  Homma, a Japanese futures trader discovered that the emotions of traders had a tremendous influence on the market.  In fact, when added to the equation the result was a big difference between the value and price of an asset.  In simple terms, Candlestick Chart analysis is used to measure the market emotions surrounding a certain stock.  The system is complex and sometimes hard to understand but is very popular with traders.  Similar to bar charts, the daily line of a candlestick chart shows the open, close, high and low of the market on a given day.  The wide part or Real Body shows whether the closing price was higher/lower than the opening price.  The Candlesticks shadows indicate the highs/lows and how they compare to the open and close.  Candlesticks are used by analysts to determine when to enter and exit trading.  Christopher Daniels does a great job illustrating the principles of Candlestick Charts for the beginner.  I highly recommend for traders researching charts and patterns and how they can be used to identify market trends.