Japanese Candlestick and its Back Ground

Japanese candlestick

Foundations of Japanese Candlestick:

Japanese Candlestick holds a great significance in Forex trade. Traders and investors all over the world prefer Japanese Candlesticks nowadays. They prefer it because of worthiness. Let’s have a look at its foundation and basic information.


During the 18th century, Japanese devised this effective form of technical analysis for the measurement and analysis of their international trade of crops particularly Rice. As most of the Japanese traders were involved with the trade of rice. Therefore it soon became an essential and permanent part of the daily trade routine of Japanese traders.


Although it was a compulsory form of analysis for the Japanese investors and traders. Yet it was still a secret formula or technique for the rest of the world till end of 80’s. It became popular worldwide in 90’s. The credit of discovering and exposing this Japanese candlestick technique goes to Steve Nison. He was a foreigner who got wind of this Japanese technical analysis and became interested in it. Nison began to understand and grasp its basic concepts. His writings got attention of the world. Soon Japanese Candlestick made its mark in the forms of technical analysis.


The greatest strength of Japanese Candlestick is that it can be used to predict the price movement of a currency for any duration or time period. Its results are as effective and reliable for a day trade as they are for long-term trade.


The basic concepts or the foundation of Japanese Candlestick include:

  • You draw a white hollow candlestick when the open is below the close.
  • Alternatively you draw a black filled candlestick when the open is above the close.
  • The filled or may be hollow part of the candlestick is referred to real body.
  • Shadows are the lines above or below the real body. Shadows are also called high or low ranges.

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