Japanese candles are the most famous methods of technical analysis and one of the easiest means of graphic representation in the financial markets, dating back to the Middle Ages around 1600 AD, when the Japanese used them in the rice trade. The Japanese candle expresses the price movement during a specific time period.
The Japanese candle consists of the opening price, the closing price, the highest price and the lowest price.
Japanese candles
Types of Japanese candles:-
Hammer candle:
It is a candle with a relatively long tail without an upper shadow, and if it is found, it is very small, that is, it resembles a hammer in its composition, and it is a highly reflexive candle so that it comes at the end of the downtrend.
Inverted Hammer Candle:
It is a candle whose lower shadow is very small and sometimes not visible, while its upper shadow is relatively large.
* Ingestion candle:
It is a large bullish candle relative to the bearish candle that preceded it so that its lowest price is lower than the previous candle and its highest price is higher than the previous candle.
* Swallow candle:
It is a large bearish candle relative to the bullish candle that preceded it so that its highest price is higher than the previous candle and its lowest price is lower than the previous candle.
The Hanging Man's Candle:
It is a candle with a small body, a lower shadow, a long weakness, and a very small upper shadow. It is a reversal candle that comes at the end of an uptrend.
Doji candle:
The candle is a line whose closing price is equal to its opening price, and its upper and lower shadows are often small in most cases.
Evening star candle
It is a long bullish candle followed by a relatively small candle that opens and closes above it, followed by a long bearish candle. This is a type of trend reversal pattern.