The candlestick way of technical analysis traces its roots to Japan from where it originated and now is very popular and used worldwide. Several patterns of candlestick exist on paper as well as on ancient Japanese texts that throw in depth light on the theory and fundamentals of it.

It is said that in the seventeenth century the rice trade carried out by the Japanese was done through such form of technical analysis. In 1900, Charles Dow supposedly used this as the basis to create a modern United States version of candlestick technical analysis. But the real credit of this charting process is bestowed upon Homma, a rice trader hailing from a place called Sakata.

This method is quite useful to get accurate low, high, close, open prices in a given timeframe. While the shadow of the candle, depicts low and high price points, its body the opening and closing prices. Some kind of shading is done to which way the price is going. If the candle is shaded going downwards, it means that the price at which a stock closed, was lower than what it opened up to.

Similarly, a candle shown shaded upwards shows the opposite. It depicts that the opening price was lower than the closing price. Candlestick technical analysis has lots of variations which are used by different people according to their convenience. Like variation of patterns, of colors used for shading.

In the current times, a stock trader needs to be acting as a candlestick technical analyst as well. This is to correctly gauge and understand prices of stock better. Nowadays, there is software also available in the market which does the job of this analysis for the stock trader. It analysis better, accurately and gives several options to the user like of shading, of different patterns that can be used.

Technical analysis is a huge trend in the stock markets worldwide. For the survival of any trader here, one has to ingrain technical analysis into his/her businesses. Candlestick technical analysis in one of the most important components of technical analysis for the features it has and for the way it understands the mind of the trader.