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Japanese Candlesticks Names And Definitions

Japanese Candlestick | FXLORDS

Japanese candlesticks were invented by rice merchants in the 17th  century but nowadays they are considered the number one tool when trading Forex. Below is a quick explanation to each candlestick along with a picture of how it looks like.

While the Japanese candlesticks charting and analysis was different from the US version initiated by Charles Dow around 1900, however they both rely on the following hypothesis

1.    The way prices move – their behavior – in the financial market is more important than what can explain it (financial information, economic releases, global news, etc).
2.    All known information is reflected in the price of a specific currency at all times
3.    Buyers and sellers (market participants) act according to their expectations and their emotions.
4.    Financial markets fluctuates.
5.    Prices should not be a reason for a devaluation of a currency.

Candlestick layout

When the charting system displays a Japanese candlestick, the shape of the candle will be determined by:

1. The opening price;
2. The closing price;
3. Lowest price recorded during the same time period;
4. Highest price recorded during the same time period;

The candlestick will be black when the closing price is lower than the opening price, and If the closing price is higher than the opening price. It should be noted here that candlesticks color might differ from white and black depending on the platform used, but usually it is relatively easy to distinguish between them.

FXLORDS | Japanese Candlesticks

Important shapes of the Japanese candlesticks

Black Candle with Long Body Black candlestick with long body

White Candle with Long Body White candlestick with long body

Black Candlesticks with a long upper Shadow and short lower Shadow Black candlesticks with a long upper shadow and short lower shadow

Whilte Candlesticks with a long upper Shadow and long lower Shadow Black candlesticks with a short upper shadow and long lower shadow

White Candlesticks with a long lower Shadow and short upper Shadow White candlesticks with a long lower shadow and short upper shadow

Whilte Candlesticks with a short upper Shadow and a long lower Shadow White candlestick with a short upper shadow and a long lower shadow

Black Candle Normal black candlestick

Normal White Candle Normal white candlestick

Black Marubuzo Black Marubuzo

White Marubuzo White Marubuzo

Black Spin Top Black Spin Top

White Spinning Top White Spinning Top

Hanging Man Hanging Man

Hammer Hammer

Inverted Hammer Inverted Hammer

Shooting Star Shooting Star

Doji Doji

Long Legged Doji Long Legged Doji

Gravestone Doji Gravestone Doji

Dragon Fly | FXLORDS Dragon Fly Doji

Doju (Short Upper Shadow and long lower Shadow) Cross

Dragon Fly Doji Inverted Cross

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