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Munehisa Homma, who was born in 1724 in the city of Sakata, Japan, is known as one of the most successful and famous traders in Japan of his time. Homma started his career as a local rice trader, but then he switched to trading and began to introduce new trading techniques and strategies.
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One of the most famous trading innovations introduced by Munehisa Homma is the candlestick chart technique. Candlestick charts are a technique used to analyze price movements in trading.
This technique uses the shapes and patterns of candles to identify the direction of price movement in the market. Homma became famous among traders for his expertise in reading and predicting price movements using candlestick charts. He also often uses this technique to identify trends and make informed trading decisions. In addition, Munehisa Homma is also known as a very intelligent trader and has strong instincts. He often makes the right trading decisions based on direct observation of the market and the economic factors that influence it. Munehisa Homma's success in trading is also reflected in his extraordinary wealth. He is estimated to have a fortune of around 100 million taels or the equivalent of about 10 billion US dollars at this time.
Munehisa Homma's great legacy and influence on the trading world is still felt today. The candlestick chart technique he introduced is still one of the most popular technical analysis techniques used by traders around the world. In this article, we have learned about the inspiring story of Munehisa Homma, the "Father of the Candlestick Chart" and the legacy he left to the world of trading. We have also learned about the candlestick chart technique used by Homma and how it can help improve our trading strategy. Stay up to date with the world of trading and don't hesitate to apply the techniques introduced by experts like Munehisa Homma to increase our profits and success in trading.
Table of Contents
Who is Munehisa Homma?
Munehisa Homma was a famous trader from Japan in his time who lived in the 18th century. He is known as a pioneer of technical analysis techniques using candlestick charts that are still used by traders around the world. This technique is the basis for making trading decisions by paying attention to the patterns of price movements in the market.
The candlestick chart technique introduced by Munehisa Homma has the advantage of visualizing price movements in more detail than simpler technical analysis techniques. In this technique, price movements are represented by candlestick formations that provide more information regarding the state of the market and investor sentiment within it. In this article, we will delve deeper into the life story of Munehisa Homma, the candlestick charting technique he introduced, his influence on the trading world, and his application in trading strategies. Hopefully, this article can provide useful insights for traders to develop better and profitable trading strategies.
Munehisa Homma Life Story
Munehisa Homma was born in 1724 in Sakata, Japan. His father was a fairly successful rice merchant, and Munehisa was expected to follow in his father's footsteps. However, when she was 14 years old, her father died and Munehisa was forced to leave school to help her mother take care of the family business. Although initially he was forced to, Munehisa became increasingly interested in the trading business and began to learn how to trade rice. He learned from his father's trading experience and continued to develop his trading skills. Eventually, Munehisa became one of the leading rice traders in Sakata and managed to build his fortune through the business. However, Munehisa was not satisfied with just being a rice trader. He wanted to master the trading world at large and decided to study different types of commodities, such as rice, sugar, tea, and cotton.
Along the way, Munehisa developed a trading technique known as candlestick charts, which is currently the basis for many traders around the world. Through the candlestick chart technique, Munehisa is able to estimate commodity price movements with high accuracy. He also managed to build his fortune through trading and is considered one of the richest traders of his time. Munehisa Homma's life story is an inspiration to many people who want to achieve success in the world of trading. He proved that with perseverance, willpower, and the right risk-taking ability, one can achieve success in the trading world.
Candlestick Chart Technique
The Candlestick Chart technique was introduced by Munehisa Homma in the 18th century and has become one of the most popular technical analysis techniques used to date. This technique makes use of candlestick patterns to help in identifying price movements in the financial markets. Candlesticks themselves are a visual representation of price movements over a certain period of time. Each candlestick consists of a body and a shadow. The body shows the opening and closing price ranges, while the shadow shows the highest and lowest price ranges in that time period. There are various types of candlestick patterns that can be identified to help in financial market analysis, such as doji patterns, hammers, shooting stars, and so on. Each candlestick pattern has a different meaning and interpretation depending on its position in the price trend.
Munehisa Homma's Influence on the Trading World
Munehisa Homma is one of the most influential traders in the history of Japanese trading. His most famous contribution is the technical analysis technique of candlestick charts. This technique has become very popular and has become the basis for many traders in analyzing market price movements. Here are some of Munehisa Homma's influences on the trading world:
Introduction to the Candlestick Chart Technique
Munehisa Homma is known as the creator of the candlestick chart technique. In trading, this technique is used to analyze the price movements of stocks and commodities. This technique is considered superior to other technical analysis techniques due to its ability to identify trends, support and resistance, as well as potential price direction changes.
Introducing the Concept of Psychology in Trading
In addition to the candlestick chart technique, Munehisa Homma is also known as a pioneer in introducing the concept of psychology in trading. He considers that human behavior greatly influences market price movements, and by understanding market psychology, traders can take advantage of the price changes that occur.
Development of Trading Methods
Munehisa Homma is a highly skilled trader and has successfully developed a variety of trading methods that can increase the chances of success. One of the most widely known trading methods is the "three-line break chart", which helps traders identify strong trends and find optimal entry and exit points.
Influence on Trading Outside Japan
Although the candlestick chart technique has been known in Japan since the 18th century, Munehisa Homma's influence on trading is not only felt in Japan. After the translation of Munehisa Homma's work into English in the 1990s, the candlestick chart technique became very popular all over the world. Many traders around the world learn this technique and use it in their trading activities.
Inspiration for New Traders
Munehisa Homma's success story as a trader who was able to amass a huge fortune through trading, has been an inspiration to many new traders around the world. He points out that trading can be a huge source of income, as long as it is done correctly and equipped with proper technical analysis techniques. Munehisa Homma's influence in the trading world is huge. His works that became the basis for many technical analysis techniques and trading methods, as well as the concepts of psychology in trading that he introduced, have influenced many traders around the world.
Application of Candlestick Chart Technique
After being introduced by Munehisa Homma, the candlestick chart technique became popular and widely used in stock trading. Here are some applications of candlestick chart techniques:
Candlestick pattern identification
Candlestick patterns can provide price movement signals that can be leveraged to make trading decisions. Some candlestick patterns that are often used include: doji, hammer, shooting star, and hanging man.
Use of support and resistance
Support and resistance are certain price levels that tend to be areas of reversal in the direction of price movements. By utilizing candlestick patterns, traders can identify support and resistance levels to determine when to buy or sell.
Determining the stop loss level
Stop loss is a risk management technique used to limit losses in the event of a price movement that is opposite to the trading position. In the application of the candlestick chart technique, traders can determine the stop loss level based on the support or resistance level that has been identified.
Identify trends
A trend is the direction of price movement that can help traders determine the direction of a trading position. By utilizing candlestick patterns, traders can identify the trend that is happening and take positions according to the direction of the trend.
Determining the take profit level
Take profit is a risk management technique used to take profits at a certain price level. In the application of the candlestick chart technique, traders can determine the take profit level based on the support or resistance level that has been identified. In practice, the application of candlestick chart techniques does not always go smoothly. Traders need to make a careful observation of price movements and understand the risks associated with trading stocks. Even so, the candlestick chart technique remains one of the effective tools to help traders in making trading decisions.
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Conclusion
From the above, we can conclude that Munehisa Homma was one of the famous traders in Japan of his time, known for his contribution to developing the candlestick chart technique which became an important cornerstone in technical analysis. His remarkable life story, from a rice trader to a successful trader, is an inspiration to many people in the trading world. Munehisa Homma's influence on the trading world to this day is huge, as the candlestick charting technique he developed continues to be used by traders all over the world. The application of this technique is very useful in helping traders make the right decisions in trading in the stock market.
Although the candlestick chart technique is indeed very useful, there are still risks that must be faced in trading. Therefore, before deciding to jump into the world of trading, it's a good idea to study and understand the existing trading techniques well, as well as pay attention to the risks that may occur. In conclusion, even though Munehisa Homma has long since died, the legacy of candlestick charting techniques he left behind is still very valuable and useful to the trading world today. Therefore, it is important for traders to respect their contributions and continue to learn and develop existing trading techniques.
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Reference:
Homma, Munehisa. (2018). Munehisa Homma: The God of Markets - Revealed. (Translator: Ayu Purwati). Yogyakarta: K-Pustaka read on March 23, 2023. Gramedia. (2021). Japanese Candlestick: 11 Patterns and Techniques You Should Know. Jakarta: Gramedia. Read on March 24, 2023 Azzahra, Hana. (2022). Munehisa Homma Style Trading Strategy with Candlestick Patterns. Jakarta: Elex Media Komputindo. Read on March 24, 2023
