Candlestick charts have been around for a long time and are still widely used by traders today to track price movements in financial markets. However, understanding the various candlestick patterns can be quite challenging for beginners.
This is where our Candlestick Patterns Cheat Sheet comes in. We’ve created a poster that you can easily print or download, which contains the most common candlestick patterns. With this cheat sheet, you can quickly and easily identify patterns and make informed decisions about your trades.
Now that you have the full list of bullish and bearish candlestick patterns, it’s time to put this knowledge into action. Here are some tips on how to make the most of this cheat sheet:
The history of candlestick patterns traces back to the 18th century when Munehisa Homma, a rice merchant from Sakata, Japan, became an expert in rice futures trading at the Dojima Rice Exchange. Homma realized the importance of reliable and speedy market data, which led him to develop a system for identifying repeated patterns and trends in pricing. He drew price patterns on rice parchment paper, recorded the low, high, open, and close for each day, and started giving names to these patterns and signals, some of which are prevalent today as Japanese candlestick patterns. Homma used these patterns to predict the direction of rice futures and his skill and passion for trading made him one of the most successful traders ever.
It was said that he had 100 consecutive winning trades and was also called “god of the markets”. The Homma family at one time was considered so wealthy that there was a saying, “Iwill never become a Homma, but I would settle to be a local lord.”
His prestige was so significant that there was even a folksong: “When it is sunny in Sakata (Homma’s town), it is cloudy in Dojima (the Dojima Rice Exchange in Edo), and rainy at Kuramae (the Kuramae exchange in Edo).”
Homma’s trading principles, as applied to the rice market, evolved into the candlestick methodology for trading in general. He was the first trader to realize the importance of focusing on price action to predict the direction, which is still relevant in modern-day trading. His skills and success got him the position of financial advisor at the Japanese government, and he was later awarded the title of honorary Samurai.
Disclaimer: All investments involve risk, and the past performance of a security, industry, sector, market, financial product, trading strategy, or individual’s trading does not guarantee future results or returns. Investors are fully responsible for any investment decisions they make. Such decisions should be based solely on an evaluation of their financial circumstances, investment objectives, risk tolerance, and liquidity needs. This post does not constitute investment advice.
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