VISUALISATION

Ancient Japanese were the first ones to use candlestick patterns for their rice trading. According to Steve Nison, candlestick charting first appeared sometime after 1850.The credit for candlestick charting goes to a legendary Sakatan rice trader named Homma. His original ideas were modified and refined years of trading resulting in the system of candlestick charting that we use today.
To create a candlestick chart, a data set that contains open, high, low and close values for each time period, is needed. The coloured portion of the candlestick is called “the body”. The long thin lines above and below the body represent the high/low range and are called “wicks and tails”. The high is marked by the top of the wick and the low by the bottom of the tail. If the stock closes higher than its opening price, a white or green candlestick is drawn with the bottom of the body representing the opening price and the top of the body representing the closing price. If the stock closes lower than its opening price, a black or red candlestick is drawn with the top of the body representing the opening price and the bottom of the body representing the closing price.
Popular candlestick patterns are: Engulfing, Piercing, Doji, Hammer and the Hanging man.
Bullish candlestick patterns are: Bullish Engulfing, Bullish Piercing, Morning Star Doji and the Hammer.
Bearish candlestick patterns are: Bearish Engulfing, Bearish Piercing, Evening Star Doji and the Hanging Man.
Volume plays a main part in identifying above patterns.
These patterns are popular because: 1. Compared to traditional bar charts, many traders consider candlestick charts more visually appealing and easier to interpret.
2. They help traders to decide definitely what positions they should take.
Duration: Candlestick patterns are useful for assessing the trend of a market in the upcoming week.