The candlestick form of charting began to gain popularity in the 1990s.1 This method originated in Japan several centuries ago and basically offers the same information as bar charts. The difference is that candlestick charts can often make it easier to spot certain technical phenomena not readily apparent with a quick glance at a bar chart. Bar and candlestick charts are compared in Figures 16.1 and 16.2. Although candlesticks can be plotted for any period, from minute to monthly, I will use the term “daily” as a generic reference in this chapter to eliminate repetition.
FIGURE 16.1 Bar versus Candle Charts
FIGURE 16.2 Bar versus Candle Charts
Candlestick charts can only be plotted for markets in ...