"(...) In 1987, I became acquainted with a Japanese broker. One day, while I was with her in her office, she was looking at one of her Japanese stock chart books (Japanese chart books are in candlestick form). She exclaimed, "look, a window." I asked what she was talking about. She told me a window was the same as a gap in Western technicals. She went on to explain that while Western technicians use the expression "filling in the gap" the Japanese would say "closing the window." She then used other expresions like, "doji" and "dark-cloud cover." I was hooked. I spent the next few years exploring, researching, and analyzing anything I could about candlestick charts (...)"


"Japanese candlestick charting techniques" by STEVE NISON



A candlestick chart is a style of bar-chart. It is most often used in technical analysis of equity, currency, futures price patterns. The Japanese "candle" technicals are honed by hundreds of years of evolution. It has been developed in the 18th century by the legendary Japanese rice trader - Homma Munehisa. If you love reading about colorful terminology like "morning star", "inverted hammer" or "three black crows", then japanese candlestick charting is undoubtedly for you. It can enlighten your market analysis. They do add a vibrant color to your technical palette. In the past (1990 before), this metod was completely unknown in the West. Was it the gap in the USA. Candlestick charts provide many useful trading signals. There are other methods to forecast targets (such as resistance levels, prior support, retracements, swing objectives, and so on).

Data required in order to draw the candlestick chart:
- open
- high
- low
- close


The thick part of the candlestick line is called the real body. It represents the range between that session's opening and closing. When the real body is black (filled in) it means the close of the session was lower than the open. If the real body is white (empty), it means the close was higher than the open.