Candlestick Charting Basics

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: [email protected]

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
Constructing the Candle Line










high Shadow




close open
open
close


Real


Body





open close
open
close
low












Real Bodies / Shadows Doji

Drawing Candle Lines
Drawing Candle Lines














session open high low close 28


1 23 26 21 25 27



2 26 28 23 27 26
25
3 23 27 22 22
24
4 25 28 22 25

23
5 27 27 25 25
22



21
1 2 3 4 5

Drawing Candle Lines
Drawing Candle Lines














session open high low close 28


1 23 26 21 25 27



2 26 28 23 27 26
25
3 23 27 22 22
24
4 25 28 22 25

23
5 27 27 25 25
22



21
1 2 3 4 5

Small Real Bodies




(spinning tops)

Candle(stick) Chart - spinning tops

Small Real Bodies
Small Real Bodies

Doji
Doji

Doji after tall white candle
Doji after tall white candle

Doji after tall white
Doji after tall white

Doji as Resistance
Doji as Resistance

Gravestone Doji
Gravestone Doji

Shadows
Shadows

Long Upper (Bearish ) Shadows
Long Upper (Bearish ) Shadows

Long Upper Shadows
Long Upper Shadows

Long Lower (Bullish) Shadows
Long Lower (Bullish) Shadows

Hammer
Hammer
Hammer







































black or white













18

Hammers
Hammers

Shooting Star
Shooting
Shooting StarStar
















black or white
black or white

Shooting Star
Shooting Star

















?



High Wave Candles
Candles
Wave
High

High Wave Candle
High Wave Candle






new high

close, but??

High Wave Candle
High Wave Candle

High Wave Candle
High Wave Candle





































Who’s in Charge?













Who’s in Charge Now?

Convergence of Candles Define Support
Convergence of Candles Define Support

















































2 3 4


1

Engulfing Patterns
Engulfing Patterns



















Bullish
Bullish

Engulfing
Engulfing
Pattern
Pattern














Bearish
Bearish

Engulfing
Engulfing
Pattern
Pattern



28

Engulfing Patterns
Engulfing Patterns




Bearish











































Bullish

Bullish Engulfing Pattern
Bullish Engulfing Pattern






















































How many black candles did

this wrap around?

Bearish Engulfing Pattern
Bearish Engulfing Pattern

The Trading Triad ? ?
The Trading Triad













Candle Charts
Candle Charts
Candle Charts






























Capital
Capital
Western Preservation
Western
Western
Preservation
32

Volume confirms signal
Volume confirms signal

































High

Volume
Hammer




















33

STOPS
STOPS








Bearish

Engulfing Shooting

Pattern
star

Shooting Star (convergence)
Shooting Star (convergence)







Shooting Star

?Web site: www. candlecharts.com









?E-mail: [email protected]









?Telephone: 732.254.8660