Introduction to Candlestick Chart

Candlestick chart is one of the weapon for forex trader. Candlestick chart is called because its shape is like a candle. Candlestick chart was first used by Japanese society in the 17th century to monitor the movement of commodity prices.

Steven Nison is known as the first to popularize this model. Chart is popular among forex analysts because it has a representative nature of data such as High, Low, Open and Closing price. Actually there are many other models such as the Bar charts, Dot and the Line Chart, but the candlestick was the most popular because it has advantages as mentioned above.

Then a question arises, whether the opening price must be equal to the closing price on the previous candlestick? Of course not. Not necessarily so. In fact, it often happens that the opening price is different from the previous day's closing price.

For example during a holiday (Saturday or a week), or if there are special events can be different then the opening price to the closing price the previous time. Inequality is called the Gap price. Gap commonly used by analysts to predict forex price movement.