Применение анализа японских свечей стало популярно в 80-х годах, когда аналитика фондовых и валютных рынков вошла в фазу активного развития. Сегодня это изобретение, придуманное японцами в 18 веке, прочно вошло в обиход каждого трейдера и технического аналитика наряду с фрактальной и фундаментальной методикой. Японские свечи обладают рядом преимуществ и особенностей, которые важно учитывать.
Theory of Japanese Candlestick Analysis and Its Features
Mainly graphical analysis Japanese candles This method requires a basic understanding of how candlesticks are formed and what they mean. The basic theory behind this technique is that the position and size of a candlestick’s “body,” as well as its shadow, along with the parameters of adjacent candlesticks, provide a complete picture of whether a trend will continue or reverse. Japanese candlesticks come in only two types: bullish and bearish, but their combinations can take many forms and be interpreted in various ways.
When discussing Japanese candlestick analysis for beginners, it’s worth mentioning the presence of both “empty” and “filled” candlesticks on the chart. In the former case, such a chart pattern indicates a bullish bias, while in the latter, it indicates that the closing price has fallen below the opening price. Japanese candlesticks without shadows often serve as a strong signal of a trend reversal.
How are Japanese candlesticks formed?
Understanding Japanese candlesticks is easy. However, studying their formation is crucial to understanding how they work. Candlestick analysis takes into account four parameters: open, close, low, and high. These key terms aren’t limited to Japanese candlesticks—trading requires studying them to understand the market as a whole.
The opening and closing prices form the “body,” while the highs and lows form the shadows or “tail” of the candlestick. Technical analysis of Japanese candlesticks also takes the timeframe into account, as it determines how long it takes for a single bar to form.
Benefits of using candlestick charts
Japanese candlestick analysis in the Forex market has quite a following, and the unique features of this tool fully justify its popularity. As a unique analytical indicator, it is of interest to traders for the following reasons:
- Versatility – Japanese candlestick analysis is compatible with any technical market research tool, making it indispensable for calculating entry points;
- Detailedness – due to the fact that Japanese candlesticks always form patterns, there are many ways to accurately determine the further price movement, and their names are intuitive and easy to remember;
- The results are time-tested – The Japanese have used this technique for centuries, and since the 1980s, such analysis has become firmly entrenched in technical market research.
Japanese candlesticks are a versatile tool that forms the basis of many trading strategies, and a complete Price Action system is built on their patterns (models formed by several candlesticks).
Learning the principles of pattern formation, their interactions, and their impact on price dynamics will help you quickly read Japanese candlesticks on a chart and make trading decisions.
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