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Summary: Japanese Candlesticks

As you have been explained in detail about Japanese Candlesticks, it’s time to
summarize what you have known about this Japanese way of analyzing forex
market movements.
Definition –
Japanese Candlestick, an ancient Japanese rice traders’ tool, is a method used to
determine price movements through patterns. Each candlestick is formed by open-
close and high-low in a given time period.
Key Points –
• If the close of a given time period is above its open, a hollow candlestick is
drawn. Sometimes, a hollow candlestick is referred to as white candlestick.
• If the close of a given time period is below its open, a filled candlestick is
drawn. Usually, such candlesticks are filled with black color.
• The black or white/hollow filled parts of candlesticks are known as ‘Real
Bodies’.
• Vertical thin lines situated above and below the real bodies are called shadows
or wicks. They represent the highs and lows during a timeframe.
• The top of the upper shadow is called ‘High’ and the bottom of the lower
shadow is called ‘Low’.
• The length of the body helps in determining the intensity of the buying or
selling. The longer the body, the more intense is the selling or buying at Forex and
smaller bodies represent the low frequency of buying or selling.
• In Japanese Candlesticks, lower shadows represent low sessions and upper
shadows signify high sessions at FX.
• In terms of Forex vocabulary, bears mean sellers while bulls represent the
buyers.
Japanese Candlesticks have three kinds of patterns – Single, Double and Triple
candlesticks. These candlestick patterns get drawn depending upon the ongoing
market scenarios. One important thing for all traders and especially for the
newbies at FX – never follow the Japanese candlesticks solely. FX scenarios change

very quickly and a trader should consider these patterns along with other market
tools.

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