In the 17th century, technical analysis in order to trade rice has always been used by the Japanese wherein they focus more on the “what” which involves price action rather than the “why” which involves earnings, news, and many more. They want to focus more on the price action because based on their knowledge, all the different known information are always reflected on the price. Furthermore, actual prices do not always reflect the underlying value; together with this, market and values connected to it are always subject to fluctuation.
Candlestick charting 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 chart, 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.
Together with all these facts you can see that the biggest and most special advantage that a trader can get from the Japanese candle stick trading is that you can further understand and guage the sentiment level of the market. But are there are more to this Japanese candlestick trading than most people think; this is because due to the many different scams which have been arising and existing, this trading system was not saved from it. Yes, are there indeed scams related to the use of this system?
Due to the never ending number of scams in the foreign exchange market today, there have been issues surrounding the Japanese candlesticks. Though some people testify to its effectiveness and exceedingly remarkable function in the market, there are still other people who claim that this has been proven to be just a scam and that it will only leave you hanging on the line during a trade. Furthermore, this has not yet been proven as a fact if it is indeed a scam. It is still up to you to judge, whether you do your research on this or you have already tried the trading system. So, are there indeed any scams related with the use of this system?
