Sign Up
Enter Symbol
Lookup Patterns
Popular tickers today...

Daily Charts



Official PayPal Seal

As Seen In...


The Complete Guide to Using Candlestick Charting: How to Earn High Rates of Return safely


History of Candlestick Charting


In the 18th century a wealthy Japanese businessman, Munehisa Homma developed a technical analysis method to analyze the price of rice contracts. Today this technique is called candlestick charting and is widely used when drawing stock charts. Homma, from Sakata, Japan began trading at the local rice exchange around 1750. He kept records of the market psychology learning to boost his profits by carefully monitoring prices and not to rushing into trades.

Homma is regarded as the Grandfather of candlesticks because of his research on price pattern recognition. Homma is credited with giving rise to a research technique which became the basis for trading in Japan.

Candlestick charts use the same price data as bar charts (open, high, low, close). However, candlestick charts are drawn in a much more visually identifiable way typically resembling a candle with wicks on both ends. The high and low are described as shadows and plotted as a single line.

Learning how to read candlestick charts is easy. The price range between the open and close is plotted as a rectangle on the single line. If the close is above the open, the body of the rectangle is white. If the close of the day is below the open, the body of the rectangle is red.

How to read a candlestick in stock charting and technical analysis.


HotCandlestick.com uses red to represent blood as in Homma's references to the battle between the buyers and sellers being analogous to wars waged in ancient Japanese times. More recently in the Western world we refer to the war between bulls and bears. When the bears are winning the war sometimes we hear analysts talk about blood on the street.

Multiple candlesticks combine to form a candlestick pattern. HotCandlestick.com currently tracks 66 candlestick patterns.

Japanese candlestick analysis is a tool that offers a glimmer into the psychology of short term trading activity. This tool can be powerful when used in combination with other technical analysis tools.

Steve Nison, Father of candlesticks and author of popular candlestick charting books such as Strategies for Profiting with Japanese Candlestick Charts and Beyond Candlesticks: New Japanese Charting Techniques Revealed is widely credited with bringing candlestick charting to the Western world from Japan in 1989 when he published his first article on candlestick analysis in Futures magazine.

HotCandlestick.com, LLC is not affiliated in any way with Steve Nison.

Many authors of candlestick charting books have greatly contributed to the knowledge base and popularity of candlesticks. As reference material this web site uses some of the basic concepts of candlestick charting found in many respected publications.

Patterns? What Patterns?

View the candlestick patterns tracked by HotCandlestick.com.

Quiz yourself and get better at identifying common candlestick patterns.

Next Page

» How does HotCandlestick.com determine the strength of a candlestick pattern?


Risk Statement

Any specific investment or investment service contained or referred to in this web site may not be suitable for all visitors to this site. An investment in stocks may mean investors may lose an amount even greater than their original investment. Anyone wishing to invest or speculate in the stock market should seek their own financial or professional advice. HotCandlestick.com, LLC is not an investment advisory service and does not recommend the purchase or sale of stocks. There are no licensed financial advisors working at HotCandlestick.com, LLC. HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING SYSTEM. ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS. THE RISK OF LOSS IN TRADING STOCKS CAN BE SUBSTANTIAL. Stock trading is speculative and a substantial risk of loss exists. Past performance is not necessarily indicative of future results.









Home   Disclaimer   Privacy   Contact

Copyright © 2001-2023, All rights reserved.
HotCandlestick.com, LLC