Japanese candlesticks originate from the Japanese rice trading markets in the 1700’s. They were used to track rice futures on the world’s first futures exchange.
In recent years, Japanese Candlesticks have become popular in the US trading markets. They can be viewed as simple colorized indicators that show when price is going up, or when it’s going down.
When the price is increasing, the candle turns blue as it heads higher. When the price is decreasing, the candle turns red as it moves lower. Candlesticks have a 2 wicks and a body in the middle. One end of the body represents the opening price, and the other end represents the closing price. The wicks on either end indicate the high and the low.
Candlesticks have their own science to them. Understanding them is essential for basic chart reading skills for almost any market.
