2023-04-04 17:40:03
History of candlesticks: Candlesticks have been around a lot longer than anything similar in the
Western world.
The Japanese were looking at charts as far back as the 17th century,
whereas the earliest known charts in the US appeared in the late 19th
century.
Rice trading had been established in Japan in 1654, with gold, silver
and rape seed oil following soon after.
Rice markets dominated Japan at this time and the commodity
became, it seems, more important than hard currency.
Munehisa Homma (aka Sokyu Honma), a Japanese rice trader born in
the early 1700s, is widely credited as being one of the early exponents
of tracking price action.
He understood basic supply and demand dynamics, but also identified
the fact that emotion played a part in the setting of price.
He wanted to track the emotion of the market players, and this work
became the basis of candlestick analysis.
He was extremely well respected, to the point of being promoted to
Samurai status.
The Japanese did an extremely good job of keeping candlesticks quiet
from the Western world, right up until the 1980s, when suddenly there
was a large cross-pollination of banks and financial institutions around
the world.
This is when Westerners suddenly got wind of these mystical charts.
Obviously, this was also about the time that charting in general
suddenly became a lot easier, due to the widespread use of the PC.
In the late 1980s several Western analysts became interested in
candlesticks. In the UK Michael Feeny, who was then head of TA in London for Sumitomo, began using candlesticks in his daily work, and
started introducing the ideas to London professionals.
In the December 1989 edition of Futures magazine Steve Nison, who
was a technical analyst at Merrill Lynch in New York, produced a paper
that showed a series of candlestick reversal patterns and explained
their predictive powers.
He went on to write a book on the subject, and a fine book it is too.
Thank you Messrs Feeny and Nison.
Since then candlesticks have gained in popularity by the year, and
these days they seem to be the standard template that most analysts
work from.
Why candlesticks are important to your trading analysis? -Candlesticks are important to you trading analysis because, it is
considered as a visual representation of what is going on in the market.
By looking at a candlestick, we can get valuable information about the
open, high, low and the close of price, which will give us an idea about
the price movement.
-Candlesticks are flexible, they can be used alone or in combination
with technical analysis tools such as the moving averages, and
momentum oscillators, they can be used also with methods such the
Dow Theory or the Eliot wave theory.
I personally use candlesticks with support and resistance, trend lines,
and other technical tools that you will discover in the next chapters.
-The human behavior in relation to money is always dominated by
fear; greed, and hope, candlestick analysis will help us understand
these changing psychological factors by showing us how buyers and
sellers interact with each other’s.
-Candlesticks provide more valuable information than bar charts, using
them is a win-win situation, because you can get all the trading signals that bar chart generate with the added clarity and additional signals
generated by candlesticks.
-Candlesticks are used by most professional traders, banks, and hedge
funds, these guys trade millions of dollars every day, they can move
the market whenever they want.
They can take your money easily if you don’t understand the game.
Even if you can trade one hundred thousand dollars trading account,
you can’t move the market; you can’t control what is going in the
market.
Using candlestick patterns will help you understand what the big boys
are doing, and will show you when to enter, when to exit, and when to
stay away from the market.
#Daily_crypto_learn by @bitmex_coach
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