Candlestick Charts

Japanese candlestick charts are a popular way of looking at markets.  With chart formations like Doji, spinning tops, hammers, evening stars, and more, candlestick charting can provide a valuable perspective on the markets you trade.

To view candlesticks, right click in the chart window to display the Chart Menu and Choose Add Study. Then choose Candlesticks.

The keyboard command to change a bar chart to a candlestick chart is .CANDLE.

Candlestick charts are an ancient Japanese price prediction methodology. Candlesticks date back to the 1700's, when they were used for analyzing rice markets. At that time, Munehisa Homma, a legendary rice trader, gained a huge fortune using candlestick analysis and established a popularity for the technique.

Aspen supports candlestick charting. Candles offer an alternate perspective on market data.

The body of the candlestick is called the real body and represents the range between the open and closing prices. A "black," or filled-in, body represents that the close during that time period was lower than the open. When the body is "white," or hollow, the close is higher than the open.

Like a bar, what a candle cannot tell you is the intraday activity of a market. In looking at an up day candlestick, for example, you cannot know whether the bulls steadily dominated the session, or whether the instrument underwent some significant swings during the day:

Some candlestick analysts regard the intraday activity of a market significant in assessing the strength of a reversal pattern. This information is quickly attainable in Aspen by viewing the candlestick along side an line chart of intraday closes. Another means of viewing intraday activity is Market Profile.

The thin vertical line above and/or below the real body is called the upper/lower shadow, representing the high/low price extremes for the period.

Candlestick charting involves formation identification.

See, S. Nisson, "Learning Japanese-Style Candlestick Charting," Futures Magazine, December, 1989.