Candlestick Patterns
( Candle Patterns )
Candlestick Patterns are formed by variations and combinations of candle lines. They not only depict the price movements, but also graphically represent the psychology of the traders.The Candle patterns are ancient Japanese method of technical analysis. They were used in trading rice in 1600's and rice contracts from 1710 onwards. They were well organised by Homma Munehisa who is often referred as the father of the Japanese Candlestick charting. Click here to read about the origin of candlestick patterns.
These patterns are very appealing. Just a look of the candle pattern flashes the market's turmoil or its preparation to continue with the trend or to reverse the trend. After the shift from the hand written charts to computerised charts, the study of candle pattern is becoming more popular. With the combination of modern, western methods of technical analysis, they have become indispensable for a serious trader. They may be simple or complex. Simple Patterns
The variations of the wick and the body of the candle lines give rise to varieties of simple patterns.
Complex Patterns
In addition to the rather simple patterns listed above, there are more complex patterns which have been identified since the charting method's inception. They are formed by combinations of various types of candlelines.
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