Japanese Candles Patterns

Japanese Candles were developed and created in the 18^th century by the famous rice trader called and named Homma Munehisa who used these candlesticks to give an overview in general of the opening price, high, low & closing price over a given and specified time period.

The candlesticks charts were used by the famous rice trader to predict the future prices. After dominating the rice market, Munehisa eventually moved to the Tokyo exchanges where he gained a huge fortune using this candlesticks analysis. He's said to have made over 100 consecutive winning trade transactions.

Types of XAUUSD Charts

There are 3 types of charts used in XAUUSD charts: Line charts, bar charts & candles charts.

Line charts

Line charts - line charts are plotted using a continuous line connecting/joining closing prices of a XAUUSD, Gold metal.

Japanese Candlesticks XAUUSD Trading Patterns - 3 types of XAUUSD Trading Charts Used in Gold Trading

XAUUSD Line Chart

Bar Charts

Bar charts - bar charts are shown as series of OHCL bars. O.H.C.L. represents OPEN HIGH LOW & CLOSE price. Opening price is displayed as a horizontal hyphen to the left and the closing price is portrayed as a horizontal hyphen to the right.

Japanese Candlesticks Gold Patterns - 3 types of Gold Charts Used in Gold Trading - XAUUSD Trading Charts

XAUUSD Bar Charts

The main disadvantage of bar charts is that they are not visually appealing; therefore most Gold traders don't use these trade charts.

Candle Charts

Candlestick Charts - candle charts use the same price information as bar charts (open, high, low, and close price). However, these charts are presented in a more visually appealing way that looks like a candlestick with wicks on both ends.

Analyzing Gold Trading Setups - XAUUSD Trading Setups - XAUUSD Setups Tutorial

XAUUSD Candles Charts

How to Interpret and Analyze Japanese Candles Charts

The rectangle part is called the body of the candlestick.

The high and low are referered to as shadows & plotted as poking lines. The color is either blue or red

(Blue or Green Color) - Shows prices moved up
(Red Color) - Shows prices moved down

Most trading platforms such as and like the MetaTrader 4, use colors to mark direction of candlesticks. Colours used are blue or green: when price moves up and red: when the price moves down.

When candlesticks charts are used it's very easy to see if the price headed up/down as compared to when the bar charts are used.

Japanese Candlestick Charts Gold Patterns - 3 Types of Gold Charts Used in XAUUSD Trading - XAUUSD Trading Chart Types

Gold Candles Charts vs Bar Charts

The Japanese candlesticks charting methods also have many trade formations which are used by technical analysts to trade the XAUUSD Metal. These candle patterns have different trading analysis interpretation & the most regular Japanese candlesticks patterns are:

Marubozu & Doji candlesticks
Spinning Tops candlesticks
Reversal Patterns candlesticks
Inverted Hammer & Shooting Star candlesticks
Piercing Line & Dark Cloud candlesticks
Morning Star & Evening Star candlesticks

The above Japanese Candlesticks patterns is what makes the Japanese candlesticks charting popular among technical traders & it is why this type of analysis is the most widely used when it comes to analyzing the Gold metal prices. The analysis for these candlesticks pattern setups in XAUUSD trading is the same as the one used in stock trading & also FX trading.

Drawing These Candles Charts in MT4 Software Platform

To draw these candlesticks charts on the MetaTrader 4 software, select the charts drawing tools within "MT4 Tool Bar" as is illustrated below.

Japanese Gold Trading Candles Charts - Types of XAUUSD Trading Charts Used in Gold Trading - XAUUSD Chart Types

MetaTrader 4 Charts Drawing ToolBar

To view this charts tool-bar on MT4 go to "View" Next to file at the top-left corner of the MetaTrader 4 Software, Click "View", Then Press "ToolBars", Then check the "Charts" Button. The above tool-bar will appear.

Once the above charts toolbar, appears you as a gold trader can then select the chart type you as the trader want to convert to, If you as a gold trader wants to view using the bar chart format, press the bar chart tool-bar button like shown above, for line charts format click line chart tool-bar button, for Japanese candlesticks format click the "candlesticks chart toolbar button".

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