Candlestick analysis has been known to appear around the 1850s, wherein it has been credited to a rice trader who has been very legendary who was known as Homma who is from the Sakata town. His ideas were then modified and in the long run refined through the years of trading which then resulted to the type of candlestick charting which is now being used today in the market.
With the candlestick analysis, you have to keep a set of data which is able to contain the following values: open, close, high, and low; these values are used at certain periods depending on when you want to display them.
There is an area called “the body” which is seen to be either hollow or filled; there are also long thin lines which are found both above and below in the body which are said to represent ranges from low to high and these are known to be “shadows”, “wicks”, or “tails”.
In the candlestick chart, once the stock closes with a value higher than the opening price you will see that the hollow area of the candlestick is usually drawn wherein the bottom area of the body is said to represent the opening price, furthermore, the top of the body represents the closing price.
But since the forex market never opens and closes, how can there be an open and closing price? To identify this information, the chart provider will decide on a time, say 5 PM EST, as the daily open and closing time.
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