Japanese candlesticks are a type of chart that analysts use to help determine the direction of stocks, securities, or currencies in the markets. Today, they have become one of the most popular ways to analyze price action and its various patterns over different time frames. But Japanese candlesticks are not just a way to describe price action. Rather, the science of Japanese candlesticks has evolved to provide different ways to trade and create strategies that you can use alone or in combination with other analytical tools.
Japanese candlesticks play a crucial role in the process of making investment decisions in the financial markets, and are used by investors of all categories, whether beginners or experienced. Japanese candlesticks are one of the most important tools of technical analysis that can be used in most trading and speculation strategies.
Japanese Candlesticks: An Introduction
Japanese candlesticks are a type of chart that is used to describe the direction of price movement and the details of its movements, whether the opening and closing price or the highest and lowest price recorded during a specific period of time. Its functions are similar to other types of charts, but Japanese candlesticks are distinguished by their rapid spread and use by investors and traders due to the ease of displaying price movement data and the ease of using them in various trading strategies.
Japanese candlesticks were named after their use by rice traders in Japan many centuries ago, before being introduced as a method of describing charts and analyzing price action in the late 19th century. However, the use of Japanese candlesticks did not stop there, as the shapes formed by Japanese candlesticks were used to create certain patterns that traders used as signals of changes in price action.
Japanese candlesticks offer different patterns, whether single, double or triple, but before learning about these patterns, we must study the shape of the Japanese candle itself and learn how to read candles and what their different shapes indicate.
