While we briefly covered candlestick charts in the previous lesson, we’ll now dig in a little and discuss them more in detail. First let’s do a quick review. What is a Candlestick? Back in the day when Godzilla was still a cute little lizard, the Japanese created their own old school version of technical analysis to trade rice. A westerner by the name of Steve Nison “discovered” this secret technique on how to read charts from a fellow Japanese broker and Japanese candlesticks lived happily ever after. Steve researched, studied, lived, breathed, ate candlesticks, began writing about it and slowly grew in popularity in 90s. To make a long story short, without Steve Nison, candle charts might have remained a buried secret. Steve Nison is Mr. Candlestick. BID RATE: The rate at which traders can currently sell a particular currency. Okay so what the heck are candlesticks? The best way to explain is by using a picture: Forex candlestick anatomy Candlesticks are formed using the open, high, low and close. * If the close is above the open, then a hollow candlestick (usually displayed as white) is drawn. * If the close is below the open, then a filled candlestick (usually displayed as black) is drawn. * The hollow or filled section of the candlestick is called the “real body” or body. * The thin lines poking above and below the body display the high/low range and are called shadows. * The top of the upper shadow is the “high”. * The bottom of the lower shadow is the “low”.
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