The History of Candlesticks

While the Candlestick Chart Patterns were being developed, Japan had many military battles going on so Candlesticks use a lot of military terms for its explanations.

Investing is compared to a military battle as it uses some of the same requires the same tactics to win.

Here are some of the things similar between Trading and War:

  • Investors prepare as a general would prepare for battle
  • A Strategy is used for both
  • A lot of Psychology is used
  • Both are Competitive

The Dojima Rice Exchange was established in the late 1600's.

Merchants were now capable to grade rice, and negotiated setting the market price.

After 1710, actual rice trading expanding into issuance and negotiating for rice warehouse receipts. These become known as rice coupons, and were the first forms of futures.

With the rice coupon becoming an actively traded entity, the Dojima Rice exchange became the world's first futures exchange.

It was during this time period that Candlestick trading became more refined.

Candlestick analysis had been developed by the tracking of rice price movements.

However, in the mid 1700's they were really fully utilized and Homna came into the picture.

Munehisa Homna was the youngest son of the Homna family and inherited the family's business due to his extraordinary trading talents.

Homna's research into historic price moves and weather conditions established more concrete interpretations into what became known as Candlesticks.