The chart is composed of group of records which catch up the price movement in order of time. The chart is graphically drawn in which the time is placed on the horizontal axis and the price is on the vertical axis basically. Different from other graphs, the chart is made of minimum units which contain the open, high, low and closing rates. This section will show you the basic guide to use the charts.
The candle chart was born in Japan in Edo era and it is now broadly used in the world. Developed in the rice market at Dojima in Osaka, Mr. Sokyu Honma who was the biggest merchant at Shonai-Sakata in Yamagata, researched the candle chart in detail and succeeded in implementing the technique.
By the way, the name of the candle chart derives from the shape as you can see on the graph, and a candle is composed of the open-high-low-close rates. When the closing rate is higher than the opening rate, this candle is expressed to be white mode, on the contrary, it is expressed to be black mode when the closing is lower than the opening. The former is called as "Yo-sen" in Japanese and the latter as "In-sen". It is characteristic that you can capture what has happened in the forex market at a glance using the candle chart. The forex market is going up when the candle is in white mode, while the forex market is going down when black mode. The top of the upper line stands for the highest price and the bottom of the lower line for the lowest price in one unit.
If the one unit falls on a day, this is called to be Daily or "hi-ashi" in Japanese, which is basic pattern of candle chart analysis. If a week, it is called to be Weekly, or "Shuu-ashi". If a month, it is called to be Monthly or "Tsuki-ashi".
In this chart, the white mode stands for the Yo-sen whose closing rate is higher than the opening, and the black mode does for the In-sen whose closing lower than the opening.