Japanese Candlestick charting is just another of many technical indicators of stock market action and reaction. It should be used in conjunction with other technical indicators that are available on the Internet such as Volume, Moving Averages, Momentum, MACD, and Accumulation Distributions plots. Many day traders and swing traders use Japanese Candlesticks as quick and easily read indicators of the current Bull and Bear status of a particular stock.

Most of us are familiar with stock charts. They show us the ups and downs of prices of any stock on any exchange. The most typical chart is called the "Open-High-Low-Close" chart or as it is known in the vernacular of charting, simply as OHLC. It looks like this:

The opening price is the horizontal bar to the left. The closing price is the horizontal bar to the right and the high and low of the day are shown by the excursion of the vertical bar.

A few centuries ago, a Japanese rice trader discovered a way to modify the OHLC chart to be more useful. First he enclosed the area between the high and low price into a rectangle, he called a candle. Then he colored the candle to show the day's results. A white candle meant that the price went up that day and a black candle meant it went down. This was called the "Candle" or simply the "Body". The vertical parts above and below the Candle, if any, are called the "Wicks" or the Upper and Lower Shadows.

The candle on the left is white and represents a price that went up during the day and the candle on the right is black indicating a down day. Patterns are much easier to see with this method.

There are many sites on the Internet that will give you candlestick charts of any stock code you enter. You can review them and seek out any of the hundreds of popular patterns but if you subscribe to the information offered on this site:

We will find patterns for you! We scan 5000 stocks each day!

Each day after the USA markets close, we review thousands of stocks, searching for the most well known candlestick patterns. We will send them to you, 2 or 5 times each week. Depending on the market action from 20 to 100 stocks are found each day with a significant pattern in the last 3-5 days of prices.

A PDF File with this information will arrive in your email before the market opens, either 2 days per week or 5 days per week depending on your subscription.