Japanese Candlestick

What is Japanese Candlestick?

A Japanese candlestick is a single “candle” on a price chart that shows how the price moved during a set time (for example, 1 minute, 15 minutes, 1 hour, 1 day). Each candle packs four facts into one shape:

• Open: the first price in that time period
• High: the highest price reached
• Low: the lowest price reached
• Close: the last price in that period

If the Close is above the Open, the candle is bullish (price went up). If the Close is below the Open, it’s bearish (price went down). The thick part is the body (Open ↔ Close). The thin lines above/below are wicks or shadows (High and Low).

Why Japanese Candlestick Matter for CFD Trading

CFD traders use candlesticks because they make price movement easy to read at a glance. A Japanese candlestick chart helps you:

• Spot whether buyers or sellers were stronger in that period
• See turning points (reversals) and follow-through (momentum)
• Compare different timeframes quickly (1‑minute vs 1‑hour vs daily)

How to Read One Candle

Imagine a 15‑minute candle on EURUSD:

• Open: 1.10201
• Low: 1.10160
• High: 1.10340
• Close: 1.10321

This candle is bullish (Close above Open). The body runs from 1.10201 to 1.10321. The lower wick dips to 1.10160, showing where sellers briefly pushed price down. The upper wick reaches 1.10340, showing where buyers tested higher levels.

You might see the same idea on other markets too (indices like US30, commodities like XAUUSD,, or forex pairs like USDJPY; US Dollar vs Japanese Yen).

Common Japanese Candlestick Patterns

These are shapes traders watch for hints about the next move. Always think of them as clues, not guarantees.

• Hammer – Small body on top with a long lower wick after a drop. Buyers rejected lower prices. A classic Japanese candlestick pattern that can hint at a bounce.
• Shooting Star – Small body on the bottom with a long upper wick after a rise. Sellers rejected higher prices; may hint at a pullback.
• Bullish Engulfing – A large up candle fully covers the previous down candle’s body; buyers took control.
• Bearish Engulfing – A large down candle fully covers the previous up candle’s body; sellers took control.
• Doji – The opening and closing prices are almost the same, indicating indecision in the market. Traders often wait for the next candle to confirm the direction.
• Morning Star / Evening Star – Three‑candle patterns suggesting a potential trend change (up or down).

These are often grouped under japanese candlestick patterns in many platforms and guides.