Candlestick Charting Basics:Spotting the Early Reversals Signals

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

By

Steve Nison, CMTPresident, Candlecharts.com Inc.

“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

Media Comments

openopen closeclose

openopen

Real Body

high

low

Shadow

Real Bodies / Shadows Doji

Constructing the Candle LineConstructing the Candle Line

closeclose

Drawing Candle LinesDrawing Candle Lines

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28session open high low close

1 23 26 21 25

2 26 28 23 27

3 23 27 22 22

4 25 28 22 25

5 27 27 25 25

1 2 3 4 5

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28session open high low close

1 23 26 21 25

2 26 28 23 27

3 23 27 22 22

4 25 28 22 25

5 27 27 25 25

1 2 3 4 5

Drawing Candle LinesDrawing Candle Lines

Small Real Bodies(spinning tops)

Candle(stick) Chart - spinning tops

Small Real BodiesSmall Real Bodies

DojiDoji

Doji after tall white candleDoji after tall white candle

Doji after tall whiteDoji after tall white

Doji as ResistanceDoji as Resistance

Gravestone DojiGravestone Doji

ShadowsShadows

Long Upper (Bearish ) Long Upper (Bearish ) ShadowsShadows

Long Upper ShadowsLong Upper Shadows

Long Lower (Bullish) ShadowsLong Lower (Bullish) Shadows

HammerHammerHammer

black or white

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HammersHammers

Shooting StarShootingShooting StarStar

black or whiteblack or white

Shooting StarShooting Star

?

High Wave CandlesHigh Wave Candles

High Wave CandleHigh Wave Candlenew high close, but??

High Wave CandleHigh Wave Candle

High Wave CandleHigh Wave Candle

Who’s in Charge?

Who’s in Charge Now?

Convergence of Candles Define Convergence of Candles Define SupportSupport

12 3

4

Engulfing PatternsEngulfing Patterns

BearishBearishEngulfing Engulfing PatternPattern

BullishBullishEngulfingEngulfingPatternPattern

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Engulfing PatternsEngulfing PatternsBearish

Bullish

How many black candles did this wrap around?

Bullish Engulfing PatternBullish Engulfing Pattern

Bearish Engulfing PatternBearish Engulfing Pattern

The Trading TriadThe Trading Triad??

Candle Charts Candle Charts Candle Charts

Capital Preservation

Capital PreservationWesternWesternWestern

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Volume confirms signalVolume confirms signal

High Volume Hammer

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STOPSSTOPS

Shooting star

Bearish Engulfing Pattern

Shooting Star (convergence)Shooting Star (convergence)Shooting Star

?Web site: www. candlecharts.com

?E-mail: nison@candlecharts.com

?Telephone: 732.254.8660