
How Japanese Candlestick’s Express Sentiment
We might look at them every single day and dream of them but do you actually know the history of the candlesticks used on charts, otherwise known as Japanese candlesticks. Believed to have been born as the idea of Munehisa Homma in the 1700s, Japanese candlesticks first appeared in Japan. Munehisa was a Japanese rice trader and apparently identified that fear and greed affected the price of the markets, in addition to the law of supply and demand. The principle of the Japanese candlesticks is to measure the emotions in the market.
The candlestick allows the trader to read more into the sentiment of the market that could otherwise be seen with a line graph. The time period a candlestick represents is often changed to help the trader get a holistic overview of the market 'emotion'. These ...