Japanese Candlestick Chart and Types
The candlestick chart is one of the most used charts in the forex market. This chart originated in Japan over 100 years before the west developed the bar chart. In 1700s a Japanese men discovered the relationship between price and rice in supply and demand. He emphasized that the market is strongly influenced by the emotions of traders.
Structure of the Candlestick Chart
The candlestick chart is one of the most used charts in the forex market. Japanese candlestick will be formed by using the open, close, high, low price at the market movements.
In Case the close price is above the open price than a hollow candlestick formed.
If the close price is below the open price then it will form the filled candlestick(usually displayed as black)
The Japanese candlestick consists of the body with the open and close prices. The body between the open and close price is also called the real body. The Upper and the lower shadow of the candle is referred to as the wicks and the tails. The wicks represent the pinpoint of the highest and the lowest price of the currency pairs during the time span.
Types of Candlestick Chart
There are three basic types of Japanese Candlestick Patterns:
As we all know, the Japanese candlestick with the long upper and the long lower shadow with the small real body is called the spinning top. The spinning tops will be representing the indecision between the buyer and seller.
The Marubozu trend of the candlestick will represent the candle with no shadow from the bodies. It will also be known as the shaved candlestick means no shadow and wicks.
Doji Candlestick will represent the same open and close price with the least of their bodies with short wicks. It will appear on the thin line.
There are five special types of Doji Candlesticks:
Standard Doji Pattern
Long Legged Doji
Four Price Doji