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Are Japanese Candlesticks really that useful for trading the markets?
Are Japanese Candlesticks really that useful for trading the markets?
Some centuries ago, in ancient Japan, Munehisa Momma became one of the richest men of his time and country. He did it by trading -mainly- in the rice market.
He had an unfair advantage: a proprietary way (developed by himself) to chart prices. When that technology was introduced to the West, thanks to the books of Steve Nilson, it was known as “Japanese Candlesticks”. It was said that by studying them, one could get some of that ancient “unfair advantage” over traders unaware of such marvels from the East.
In the United States and England, some traders began to adapt the Candlestick technique and improve it even further. They could see how those patterns, once so esoteric and mysterious, could become really useful tools in forecasting market movements with a very high degree of success.
These traders found new ways to combine candlesticks with other technical indicators and chart formations, utilizing these tools to create their own unique strategies for trading. Their techniques enabled them to identify entry points, manage risk, and exit trades with ease.
As the years went by, more and more traders began using Japanese Candlesticks as an integral part of…
