In the 18th century, Japanese rice traders used candlestick charts for the first time. They are easier to read and more visually appealing than the previous chart types. The opening and highest price points of a currency are displayed in the upper portion of a candle, while the closing price and lowest price point are displayed in the lower portion of a candle. A green or white candle indicates a period of rising prices, whereas a red or black candle indicates a period of falling prices.
Candlestick chart patterns and shapes are used to forecast market direction and movement. The hanging man and the shooting star are two of the most popular shapes on candlestick charts.

Candlestick charts are graphical tools that display price movements in financial markets over selected time intervals. Each candlestick presents four key price points: the opening, closing, highest, and lowest prices. A candle is bullish when the closing price is above the opening price and bearish when it closes below the opening price. The rectangular body highlights the difference between the opening and closing prices, while the wicks indicate the highest and lowest prices reached during that period. Traders use candlestick charts to evaluate trends, measure market sentiment, and identify possible reversal or continuation patterns. Common formations such as hammers, dojis, engulfing patterns, and spinning tops help traders predict future price behaviour. Because candlestick charts present detailed market information in a straightforward visual format, they are widely used by beginners and experienced traders to make more informed investment and trading decisions.