Japanese Candlesticks.

In eighteenth-century Osaka, merchants traded rice contracts on the Dojima exchange — one of the first futures markets in the world. The story goes that a trader named Munehisa Homma made a fortune because he understood something simple: price isn't moved by numbers alone, but by people's fear and greed. That school of thought gave us the charting method we now call "Japanese candlesticks", which the author Steve Nison brought to the West in the early 1990s.

Why is it on every trading platform in the world? Because a single candle shows you four numbers at a glance — and the story of the battle between buyers and sellers during that period. A plain line chart only gives you the close. A candle tells you who started, who tried, and who won in the end.

Anatomy of a candle: four numbers

• Open: the first price of the period.
• Close: the last price of the period — the most important one, because it's the "final verdict".
• High and Low: the two furthest points price reached.

The distance between the open and the close is the body. If price closed above the open the candle is bullish (green); if it closed below, it's bearish (red). The thin lines above and below the body are the wicks (or shadows): places price visited and was rejected from.

Figure 1.1 is real gold on the 4-hour chart, 4 September 2026. Each candle is 4 hours of trading. Look at the two neighbouring candles in the middle:

Read the story: in the first candle sellers were in control from the first minute to the last — almost no upper wick and a huge body. In the second candle sellers tried to continue and pushed price down to 4365.6, but buyers hit back hard and closed the candle at 4436.4. That $28.2 lower wick is the footprint of rejection: sellers got there and couldn't stay.

What you'll learn in this book

1. Reading body strength and wick length, and the key single-candle patterns: hammer, shooting star, doji (Chapters 2 to 4 and 6).
2. Two- and three-candle patterns: engulfing, morning and evening star, soldiers and crows, harami (Chapters 5, 7 and 8).
3. Why location matters more than shape, and what real numbers say about each pattern's hit rate (Chapters 9 and 10).
4. Turning a candle into a complete trade with entry, stop, target and a correct lot size, then a quick reference (Chapters 11 and 12).