Candlestick charting was developed in Japan about 1500 years ago by rice traders, and is now being applied to Western trading methods. A candlestick is composed of two features. The first is the real body, which is the rectangle between the open and close and is what gives candlestick graphs their distinctive appearance. The second distinctive feature is the shadows of a candle, which are drawn in the area above and below the real body and the extremes. It is possible to have one, two or no shadows. When a shadow is absent, the result is referred to as a shaved candle.
Much of candlestick analysis revolves around the search for, and identifying, reversal patterns. Many of the distinctive terms associated with candlestick charting come into use with reversal patterns. Candlestick analysis can offer more than you think. Describing the unique features of candlesticks and candlestick charting, the author describes a method of using candlesticks with fresh perspective. ... download the eBook to read more
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