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Candlestick
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Description
The Japanese developed a method of technical analysis in the 1600s
to analyze the price of rice contracts. This technique is called
Candlestick charting.
Candlestick charts display the open, high, low, and closing prices
in a format similar to a modern-day bar-chart. Articles written by
Steven Nison that explain Candlestick charting appeared in the
December, 1989 and April, 1990 issues of Futures Magazine. The
definitive book on the subject is Japanese Candlestick Charting
Techniques also by Steve Nison).
You may find the expert named "Equis - Candlesticks" helpful in
interpreting Candlestick patterns.
Some investors are attracted to Candlestick charts by their
mystique--maybe they are the "long forgotten Asian secret" to
investment analysis. Other investors may be turned-off by their
mystique. Regardless of your feelings about the mystique of
Candlestick charting, we strongly encourage you to explore their
use. Candlestick charts dramatically illustrate supply/demand
concepts defined by classical technical analysis theories.
Interpretation
The interpretation of candlestick charts is based primarily
on patterns. Patterns are generally broken down into Bullish and
Bearish patterns. The most popular patterns are explained here:
A good way to learn about candlestick patterns is to attach the
expert named "Equis - Candlesticks" to a chart.
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