The technique of Japanese candlesticks appeared in Japan in the 17th century with the rice futures market. This is HOMMA (1724-1803) in his book “Golden fountain” which explained for the first time the candles. For the Japanese master candles market has a code to decipher. For one who has the key market becomes transparent.
He speculated on the future of rice and gradually acquired a deep knowledge of rice markets movements and built one of the largest fortunes of his time. But this market transparency does not mean that it automatically becomes predictable. It will require each time a capacity study, observation, analysis and intuition to find the right answer.
We’ll take the example of the martial arts fighter knows a cipher, a series of movements, the katas that anticipate and respond to the opponent. But the opponent is not automatically predictable. The martial arts expert spends years for the meaning of the movements, their vocabulary. He gains more practice than theory. It’s the same for Japanese candles.
We must recognize the different figures and apply this recognition until it becomes a conditioned reflex. Learn the language of Japanese candles returns to learn to speak a foreign language fluently. The approach is diametrically opposed to the Western approach, Japanese candle is a living language and integral market. Western methods are based on relatively rigid structures. Bar charts have a fixed structure and bar charts no language exists.
Eastern approach is based on flexibility and adaptation. The second important figure: Seiki Schimizu: he was born in 1915, he is the author of “The Japanese chart of charts” It compares the market movement of a mouse and a cat trader with telepathic powers. The trader must be able to instant decision. The market is alive, it must be observed directly.
Takehiro Hikita Finally, one of the current masters compares the market to a “dance” the trader must be in harmony with the movement.
All this makes Japanese candles an indispensable tool for decision support. However you must use candles in their entire context and not make candles figures outside their global context.
You have to read the flow of the market and respond. We need to identify what works; This requires confronting the market directly under the gaze of a master who knows we isolate the secret to our success.
The master is the one who says “you focused, your education, your analysis here and not elsewhere”
Japanese Candlestick Charting Techniques in Stock Market