Candlestick Charting Basics:
Spotting the Early Reversals Signals
By
Steve Nison, CMT
President, Candlecharts.com Inc.
555 Route 18 South PMB 2000 East Brunswick, NJ 08816 USA Telephone: 732-254-8660 Facsimile: 732-390-6625 Web site: www.candlecharts.com E–mail: nison@candlecharts.com
Media Comments
“Japan's Candlesticks Light Traders' Path” --- Wall Street Journal “Whether you day trade or hold positions candlesticks are a must” --- Investors Library “Candlesticks: A New Light in Technical Analysis” --- Barron’s
Constructing the Candle Line
high close
Shadow
open
Real Body
open low close
Real Bodies / Shadows
Doji
Drawing Candle Lines
session open high low close 1 2 3 4 5 23 26 23 25 27 26 28 27 28 27 21 23 22 22 25 25 27 22 25 25
28 27 26 25 24 23 22 21
1
2 3 4 5
Drawing Candle Lines
session open high low close 1 2 3 4 5 23 26 23 25 27 26 28 27 28 27 21 23 22 22 25 25 27 22 25 25
28 27 26 25 24 23 22 21
1
2 3 4 5
Small Real Bodies (spinning tops)
Candle(stick) Chart - spinning tops
Small Real Bodies
Doji
Doji after tall white candle
Doji after tall white
Doji as Resistance
Gravestone Doji
Shadows
Long Upper (Bearish ) Shadows
Long Upper Shadows
Long Lower (Bullish) Shadows
Hammer
black or white
18
Hammers
Shooting Star Shooting Star
black or white
Shooting Star
?
High Wave Candles
High Wave Candle
new high close, but??
High Wave Candle
High Wave Candle
Who’s in Charge?
Who’s in Charge Now?
Convergence of Candles Define Support
2 1
3
4
Engulfing Patterns
Bullish Engulfing Pattern
Bearish Engulfing Pattern
28
Bearish
Engulfing Patterns
Bullish
Bullish Engulfing Pattern
How many black candles did this wrap around?
Bearish Engulfing Pattern
The Trading Triad
Candle Charts
?
Western
Capital Preservation
32
Volume confirms signal
High Volume Hammer
33
STOPS
Bearish Engulfing Pattern Shooting star
Shooting Star (convergence)
Shooting Star
?Web site: www. candlecharts.com ?E-mail: nison@candlecharts.com ?Telephone: 732.254.8660