Kagi Chart

The Kagi chart is a graphical representation created in Japan at the end of the 19th century. It alternately displays a series of vertical lines tracing the rise and fall of prices. It thus allows for a visualization of bullish or bearish price trends relative to a so-called reversal threshold.

The reversal threshold defines a trend reversal.

For example, by choosing a 2% threshold, the bullish trend—illustrated by a green vertical bullish line—continues to increase as prices progress, as long as prices do not reverse downward by more than 2% relative to the highest price of the current trend.

If prices fall by at least 2%, then a new red vertical line, this time oriented downward, is drawn until the next bullish trend of an equal or greater progression of 2% occurs.

Example

NOTE: The reversal threshold can be defined as a percentage or in monetary units.