In
financial
Finance is the study and discipline of money, currency and capital assets. It is related to, but not synonymous with economics, the study of production, distribution, and consumption of money, assets, goods and services (the discipline of fina ...
technical analysis, a candlestick pattern is a movement in prices shown graphically on a
candlestick chart that some believe can predict a particular market movement. The recognition of the pattern is subjective and programs that are used for charting have to rely on predefined rules to match the pattern. There are 42 recognized patterns that can be split into simple and complex patterns.
History
Some of the earliest technical trading analysis was used to track prices of rice in the 18th century. Much of the credit for candlestick charting goes to
Munehisa Homma
(also known as Sokyu Honma or Sokyu Homma and sometimes called the God of markets ; 1724–1803) was a rice merchant from Sakata, Japan who traded in the Dōjima Rice Exchange in Osaka during the Tokugawa Shogunate. He is sometimes considered to ...
(1724–1803), a rice merchant from
Sakata,
Japan
Japan ( ja, 日本, or , and formally , ''Nihonkoku'') is an island country in East Asia. It is situated in the northwest Pacific Ocean, and is bordered on the west by the Sea of Japan, while extending from the Sea of Okhotsk in the north ...
who traded in the Ojima Rice market in
Osaka during the
Tokugawa Shogunate. According to Steve Nison, however, candlestick charting came later, probably beginning after 1850.
Formation of candlestick

Candlesticks are graphical representations of price movements for a given period of time. They are commonly formed by the opening, high, low, and closing prices of a financial instrument.
If the opening price is above the closing price then a filled (normally red or black) candlestick is drawn.
If the closing price is above the opening price, then normally a green or hollow candlestick (white with black outline) is shown.
The filled or hollow portion of the candle is known as the body or ''real body'', and can be long, normal, or short depending on its proportion to the lines above or below it.
The lines above and below, known as ''shadows'', ''tails'', or ''wicks'', represent the high and low price ranges within a specified time period. However, not all candlesticks have shadows.
Simple patterns
Complex patterns
See also
*
The Island Reversal
Further reading
*
References
External links
''Bulkowski's Stock Market Patterns'' On line, includes research, statistical validation, and follow-on results.
{{DEFAULTSORT:Candlestick Pattern
Candlestick patterns
Technical analysis