Stock Indices Trading Japanese Candles

Indices Trading with Candle

Brief History

Candlesticks were created in the 18th century by the legendary rice trader called Homma Munehisa to give an overview of the opening, high, low and closing market price over a given period of time.

They were used by legendary rice trader to predict future market trading prices. After he dominated the rice market, Munehisa eventually moved to the Tokyo exchanges where he gained a huge trading fortune using this analysis. He is said to have made over a hundred consecutive winning trades.

Types of Trading charts

There are 3 types of charts used in Indices: Line, bar & candles.

Line - plots a continuous line connecting closing prices of indices.

Bars- highligthed as sequence of OHCL bars. OHCL represents OPEN HIGH LOW and CLOSE. The Opening price is displayed as a horizontal dash on left & closing price as a horizontal dash on right.

The main disadvantage of a bars is that it's not visually appealing, therefore most traders do not use them.

Candlesticks Patterns - Japanese Candlestick Charting Techniques - these use the same price data as bar charts (open, high, low, and close). However, they are displayed in a much more visually identifiable way which looks like a candlestick with wicks on both its ends.

How to Analyze Japanese Candlestick Charting Techniques

The rectangle section is known as body.

The high & low are described as shadows & drawn as poking lines.

The color is either blue or red

• (Blue or Green Color) - Prices moved up
• (Red Color) - Prices moved down

Most trading softwares like the MT4, use colors to mark the direction. Colors used are blue or green: when price moves up, red: when price moves down.

Candlesticks Vs. Bar Stock Chart

When candlesticks are used it's very easy to see if the price moved up or down as opposed to when bars are used.

The Japanese Candlestick Charting Techniques also have very many formations that are used to trade the Trading market. Japanese Candle Charting Techniques - candles patterns have different analysis interpretation & the most common Japanese Candle Charting Techniques are:

The above Japanese Candlestick Charting Techniques and Patterns is what makes the Japanese candlesticks popular among stock trade technical traders & it's why this type of analysis are the most widely used when it comes to analyzing the market. The analysis for these Japanese candles pattern formations in trade is the same as that one used in stocks trading - Japanese Candle Charting Techniques.

Drawing japanese Candlesticks Stock Charts on MetaTrader 4 Software

To draw these on the MT4, select the MetaTrader 4 charts drawing tools within the "MT4 Toolbar" - shown below.

To view this tool-bar in MT4 go to 'View' Next to file tab at top left corner of the MT4 Platform, Click 'View', Then Click 'Toolbars', Then check the 'Charts' Button Key. The above tool bar will appear.

Once the above tool bar, appears you can then choose the type you want to convert to, If you want to view using the bar format, click the bar tool button as displayed above, for line format click the line tool button key, for Japanese candles format click the "candlesticks tool button".

Indices Trading Japanese Candlesticks. Japanese Candlesticks Candle Sticks Patterns - Indices Trading Using Candlesticks. Indices Trading with Candlestick - How to Trade with Stock Candle Pattern