Japanese Candles

Japanese Candles

In the previous article on Forex Chart Types we explained a little about how the Japanese candles work, but now we will see all the information about them in more detail.

What is a Japanese candle?

[caption id="attachment_668" align="aligncenter" width="400"] Japanese Candles[/caption]

Long ago the Japanese created their version of technical analysis to operate. Steve Nison discovered this secret technique of the Japanese to read charts, thanks to a Japanese broker friend of his. Steve researched, studied, lived, breathed and ate Japanese candles!

He started writing about them little by little until he popularized them in the 1990s. Without Steve Nison, the Japanese candle charts, the most used today by millions of trades around the world, would still remain a secret .

[caption id="attachment_669" align="aligncenter" width="605"] Japanese Candles[/caption]

The Japanese candles are formed using the highest price, the lowest, the opening price and the closing price.

• If the closing price is above the opening price, then an empty candle (or white / green color according to the configuration of the trading platform) is drawn.


• If the closing price is below the opening price, a colored candle is drawn, usually black (or red depending on the trading platform configuration).


• The colored or empty section of the Japanese candle is known as the "body".


• The thin lines that appear above and below the body show the highest and lowest price range and are known as "shadows".


• The top of the top shadow is the "Maximum".


• The bottom of the lower shadow is the "Minimum".

NOTE: This article is not an investment advice. Any references to historical price movements or levels is informational and based on external analysis and we do not warranty that any such movements or levels are likely to reoccur in the future.