Japanese Candlestick Charts
By Tim Grimsley
When asked to time about the advantage of japanese, I stated that I they definitely had a positive impact on my account. Candlesticks make trading a lot easier for me. To draw a comparison, I would say that plain bar charts are to candlesticks, as radio is to color television. They are a movie playing out in front of you, the key is learning to interpret the scenes.
Candlesticks allow you to see at a glance what type of "mood" the market is in. Are the bulls or bears winning the battle?
Classic candlesticks are originally from Japan, hence the name. In traditional candlesticks are filled or hollow to indicate market direction. Most chart companies today serve them as green and red. The green bars indicate the market has move higher in price, while the red indicates lower prices.
Candlesticks are also read by patterns, this type of interpretation takes a little while to master. Those who use the patterns to daytrade must have extensive practice at spotting them. Daytrading is a fast moving game and you must be able to recognize the different patterns almost instantly.
I trade patterns rarely. Instead I use candlestick indications combined with other indicators to form an overall picture of market patterns and direction. For those new to trading I would suggest that they learn to read candlestick charts right from the start. If I were starting out again that is exactly what I would do.
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