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Introduction Of Japanese Candlestick Technique

Sokyu Honma, who was a rice future trader, developed the Japanese Candlestick technique. This Technique is now popular all over the world.

Construction Of Candlestick
Open, High, Low, Close Prices are used to create Candlestick Charts. The X Axis represents Time (Days/Weeks/Month/Minutes) while Y Axis represents prices. By using the Open, High, Low & Close Price data of any stock, any one can construct Candlestick Chart.

Parts Of Candlestick

Every Candlestick can be divided in to three parts.
1> Upper Straight Line
2> Body
3> Lower Straight Line

The highest point of Upper Straight Line is the High Price. The Lowest Point of Lower Straight Line is Low Price.

If the close price is greater than open price the body of candlestick has White Body.



If the open price is greater than the close price then the candlestick has Black Body.

Technical Analysis Symmetrical Triangle

Symmetrical Triangle is a continuation Pattern. Hence the assumption is there already exists an Up Trend or Down Trend. Symmetrical Triangle Pattern can be explained as follows.

Symmetric Triangle Pattern represents a pause in the existing trend (up trend or down trend) after which the original trend resumes. If the original Trend is Up Trend, the symmetric triangle is called as Bullish Symmetric Triangle, while for Down Trend it is called as Bearish Symmetric Triangle.



Other Continuation Patterns

Technical Analysis Ascending Triangle

Technical Analysis Descending Triangle

Technical Analysis Flags & Pennants Pattern

Technical Analysis Rectangle Formation

Technical Analysis Ascending Triangle

Ascending Triangle is a Bullish continuation Pattern. Hence the assumption is there already exists an Up Trend. Ascending Triangle Pattern can be explained as follows.

Ascending Triangle is a variation of Symmetric Triangle Pattern. The difference between Ascending Triangle & Symmetric Triangle is that the upper trend line is flat & lower trend line is rising. This means the buyers are more aggressive than seller. This is a bullish Pattern & ultimately it results in upward breakout & up trend continues.



Other Continuation Patterns


Technical Analysis Symmetrical Triangle

Technical Analysis Descending Triangle

Technical Analysis Flags & Pennants Pattern

Technical Analysis Rectangle Formation