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Japanese Candlestick ChartsJapanese Candlestick ChartsA candlestick is made up of three parts, an upper shadow, a lower shadow, and a real body. The highest point of the upper shadow represents the high. The lowest point of the lower shadow represnts the low. If the stock closes higher than its opening price, a white candlestick is drawn with the bottom of the real body representing the opening price and the top of the real body representing the closing price. If the stock closes lower than its opening price, a black candlestick is drawn with the top of the real body representing the opening price and the bottom of the real body representing the closing price. See the diagram below.
Now lets take a look at some different Japanese candlesticks and some patterns they form. Click on the links below. Doji Marubozu Hammer Hanging Man Bullish Engulfing Pattern Bearish Engulfing Pattern Piercing Pattern Dark Cloud Cover Bullish Kicking Bearish Kicking Morning Star Evening Star Shooting Star Bullish Harami Bearish Harami Stepen W Bigalow does a great job of teaching candlestick charting. Explained in a way that is easy to understand but also very detailed. STEPEN W BIGALOW Trader and author Stephen W Bigalow's site is a candlestick trading mega site. Stephen is one of the foremost authorities on Candlestick charting. He offers "Candlestick Basics", a free newsletter, a free e-book, and many services. His site includes:
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