Japanese candlestick charting dates back to the 18th century in Japan, when it was used to trade the futures market.

This method of price charting is attributed to Munehisa Homma, a highly respected rice trader from Sakata, who successfully traded Japan’s rice coupon (futures) market.

Homma realised there was a distinction between price and value in the market.

He also knew that supply and demand was the driving force behind any price movement but he also believed that investors’ psychology and traders’ emotions influenced the price of rice.

He knew that being able to gauge the market’s sentiment was imperative in order to succeed in trading.

He researched years of historical prices and recorded the previous day’s prices (open high, low, close) in a pictorial way that became known as Candlesticks.

Homma used the Candlestick patterns to forecast the direction of the rice market.

It was reported that he took 100 profitable consecutive trades!

Japanese Candlesticks were unknown to the West until the late 1980’s when Steve Nison started writing articles that explained the new price charting method.

His book Japanese Candlestick Charting Techniques, unveiled the Candlesticks to western traders and investors.


FXTM published a new E-book that explains the Candlestick Chart and Strategies!

Signup today and check out the E-book today!

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