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The Japanese were the first to
use technical analysis to trade one of the world's first rice futures markets
in the 1600s. A Japanese man by the name of Homma who traded the futures
markets in the 1700s discovered that although there was link between supply
and demand of the rice, the markets were also strongly influenced by the emotions of the traders.
Homma realized that he could
benefit from understanding the emotions to help predict the future
prices. He understood that there could be a vast difference
between value and price of rice.
This difference between value
and price is as valid today with stocks, as it was with rice in Japan
centuries ago.
The principles established by
Homma in measuring market emotions in a stock are the basis for the
Candlestick Chart analysis, which we will present in this seminar.
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