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What is a Japanese Candlestick in Forex Trading?

Unfortunately, stuff that seems obvious can be disastrously deceiving. 

History is littered with lessons of how assumptions ruined people's lives.

And most traders jumping into Forex can sometimes skip basics. Like crisply understanding the Japanese candlestick.

For technical analysts, a Japanese candlestick is the center of all their analysts.

A Japanese candlestick is a tool. It is used to chart the price movements of securities within a given time frame. The candlestick was the idea of a Japanese rice trader, Munehisa Homma.

Unlike other forms of illustrating price movements, the Japanese candlestick is the most detailed and easiest to use. Right off the bat, a trader would immediately know the state of price action within a given time frame.

It has the upper shadow, the body, and the lower shadow. 

The highest point of the upper shadow is the highest price reached; the top of the body is the closing price, while its bottom is the opening price. The lowest point of the lower shadow is the lowest price printed on a given time frame.


Keen to learn the forex market? Check out our other explainer articles in our Learn Forex blog. 


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