Candle Charts

The first candle charts guided the businesses transactions of a simple Japanese rice farmer. Soon after the year of 1850, a man named Homma wanted to develop a better way to keep track of his rice sales. He also wanted to have a graphic way of illustrating the amount of rice he still needed to sell.

He developed the first candle charts. The long candlesticks on certain charts let him know that he had sold lots of rice. Any short candlesticks on the same chart told him that, during a certain period, he had made only limited rice sales.

Homma might have used two or more charts—one chart to graph rice sales, and one to graph the supply of unsold rice. Today, candle charts put together information on sales and acquisitions. That is done by using colored and white candles.

Today candle charts have become popular among those who buy and sell stocks. Stock traders have now developed 4 types of candle charts. One type of chart shows the market high, low, open and close for a defined period, usually one day. The other charts graph transactions that take place on the market floor.

One chart, for example, graphs the number of trades completed. Once a set number of trades are reached, a new “candle” is placed on the chart. The same criterion governs the use of candle charts to define the number of contracts traded. A third chart shows where the trading price falls in relation to a set range. The range is defined by a “candle.”

The charts used by stock traders are often called candlestick charts. A “candlestick” seems to protrude from the top and bottom of each chart “candle.” Those candlestick charts are the focus of most online literature about candle charts.

Why should candle charts be of interest to someone who has chosen to read about stress, or aromatherapy? Candle charts provide any nonprofit group with an excellent way to illustrate to members the state of the group’s finances. Candle charts can help a nonprofit group to reach its financial goal.

Nonprofit groups need to use slightly modified candle charts. They do not need to have a candlestick at both ends of each candle. An effective candle chart can have a single “wick” at the top of each fully-drawn “candle.”

The treasurer who wants to use a candle chart must define his or her goal. What amount of money does the group need to gather from its fund raising drive, or collect from contributors? That total can then be broken down, and used to create a monthly or weekly goal.

The treasurer places a line on a graph at the spot where the monthly or weekly goal is located. The treasurer explains to the group members that he or she would like to see a “candle” each month or week. That “candle” would show an accumulation of money equal to the goal amount.

Now the treasurer must understand that the lighting of a candle is seen as a happy event. The treasurer then tells the group members that he or she will “light” any candle that represents attainment of the monthly or weekly goal amount.

The treasurer does not really have to light any candles, but the treasurer should draw a burning flame at the top of a candle that reaches up to the goal amount. If a treasurer wants to add a bit of drama to his or her presentation, then actual candle lighting might well take place.

Use of candle charts has proven to be an effective way to encourage group participation in fund raising. Contributors feel rewarded by the appearance of a “flaming” candle.