Advanced Express Class new - Amazon S3Express+Cla… · Steve Nison’s ADVANCED Candlestick EXPRESS Class WithSteve Nison, CMT President: Candlecharts.com Advanced Candlestick Charting

© candlecharts.com 1

Steve Nison’s ADVANCED Candlestick EXPRESS Class

WithSteve Nison, CMTPresident: Candlecharts.com

AdvancedCandlestick

ChartingTechniques

AdvancedWesternCharting

Tools

Advanced Trade Management

BASIC CRITERIA• Open and close the same (or within a few cents or

pips)

PATTERN PSYCHOLOGY• For a sustainable rally market has to be “pushed

up” - a doji shows the bullish momentum has nowbeen curbed. The bulls now become concerned withthis lack of sustained strength.

• The market is at a delicate turning period and couldgo either way. - “A time to wait without a position inthe market”

1



www.candlecharts.com

doji = caution

www.candlecharts.comwww.candlecharts.com

Is this doji telling us there is somethingdifferent about the market?


Doji as Resistance




Doji and momentum trading

“Market refreshed”


Doji and momentum trading

Doji confirmingresistance




© www.candlecharts.com

Neutral Sessions

1 2 3 4 5 6 7 8 9 10

Very Strong Sessions Strong Sessions Bearish Sessions

More Bullish


Less Bullish/Bear


# Name Characteristics Nison Notes

1Tall whitedouble crew cut

No shadows

1 2 3 4 5 6 7 8 9 10

More Bullish Less Bullish/Bear

Neutral SessionsVery Strong Sessions Strong Sessions Bearish Sessions



2Tall white closingcrew cut

Small lower shadow

Lower shadowshows market can

break underopening price

1 2 3 4 5 6 7 8 9 10







3Power line(hammer)

Shadow 2x or more realbody. Can have very smallupper shadow.

1 2 3 4 5 6 7 8 9 10





4 Tall WhiteUpper shadow 25%

or less real body

Upper shadowshows somerejection at

higher prices

1 2 3 4 5 6 7 8 9 10





5Small whitewith bullshadow

Lower shadow less than 2xreal body. Can have verysmall upper shadow.

1 2 3 4 5 6 7 8 9 10







6Medium uppershadow Tallwhite

Same as line 4 but uppershadow 25% to 100% realbody

“Maintains theStrength” but

showingincreasing price

rejection

1 2 3 4 5 6 7 8 9 10





7Long uppershadow tallwhite

Same as 4 but upper shadowmore than 100% of realbody

Rare candle –”Gives slight

fearful feeling”

1 2 3 4 5 6 7 8 9 10





8White spinningtop

Can have upper and lowershadows less than 100% ofreal body

“A driftingmarket”

1 2 3 4 5 6 7 8 9 10







9Small whitewith bearshadow

Upper shadow from 1 to lessthan 2x real body. Can havesmall lower shadow.

1 2 3 4 5 6 7 8 9 10





10 Shooting starUpper shadow at least2x real body. Can have smalllower shadow.

1 2 3 4 5 6 7 8 9 10




More Bearish Less Bearish/Bullish

1 2 3 4 5 6 7

8

9 10

Neutral SessionsWeak Sessions Bullish SessionsVery Weak Sessions




1 2 3 4

5

6 7

8

910



1Long blackdouble crew cut

No shadows



1 2 3 4 5 6 7

8

910


2Long blackclosing crew cut

Small Upper shadow

Upper shadowshows market

push overopening price




1 2 3 4 5 6 7

8

910


3 Shooting StarShadow 2x or more real

body. Can have very smalllower shadow.





1 2 3 4 5 6 7

8

910


4 Long blackLower shadow 25% or less

real body

Lower shadowshows demandat lower prices





1 2 3 4 5 6 7

8

910


5Small black withbear shadow

Upper shadow less than 2xreal body. Can have very

small lower shadow.




1 2 3 4 5 6 7

8

910


6Medium lowershadow long black

Same as line 4 but lower shadow25% to 100% real body

Showingincreasing

demand and pricerejection at lower

levels






1 2 3 4 5 6 7

8

910


7Long lowershadow black

Same as 4 but lower shadowmore than 100% of real

body

Rare candle –‘”Gives slight

fearful feeling”to bears




1 2 3 4 5 6 7

8

910


8Black spinningtop

Can have upper and lowershadows less than 100% of

real body

“A driftingmarket”




1 2 3 4 5

8

910


9Small black withbull shadow

Lower shadow from 1 to lessthan 2x real body. Can have

small upper shadow.






1 2 3 4 5 6 7

8

910


10 HammerLower shadow at least 2xreal body. Can have small

upper shadow.


The


BASIC CRITERIA• Market in a downtrend

• Real Body White or Black

• Small real body at, or near, top of range.

• Lower shadow at least 2x height real body

“A chance to buy at the bottom”

STRICT CRITERIA• White real body

• No upper shadow

PATTERN PSYCHOLOGYAfter this last burst of selling, new buyinghas started. This rejection of lower prices isindicating a change in balance between bullsand bears. The net result: lessening ofbears’ confidence of sustainability of lowerprice levels (and a reason for bulls to startgetting more optimistic).




Hammer As Support

Willoftenretestlower

shadow


Candles in Context


Hammers and Stops/Momentum

Hammer near support

Protective stop ormomentum trade

Almost a strict hammer, why?Where would you set your stop?




BASIC CRITERIA• Two session pattern

• Market in a downtrend

• White real body wraps around dark realbody

STRICT CRITERIA• Small first candle small dark candle or doji

• Second candle is tall white that wrapsaround high-low range of first candle.

PATTERN PSYCHOLOGY• Small first candle reflects deterioration of

bear trend.

• Tall white candle leaves no doubt the bullsnow in driver’s seat.


Bullish Engulfing Patterns

1)Which of these doji at Aand B would you sell andwhy?

2)What strict candle patternis in the rectangle?

3)If you buy on the signal in(3) where is your stop andwhy?

4)Name three potentialresistance areas once themarket moves up from thepattern from question 3.

5)Which of these threeresistance areas do youthink would be mostimportant and why?

Doji A

Doji B

Chart Challenge



Deep Question

Two women look exactly the same, theyhave the same last name, they were bornto the same parents on the same day,month and year. Yet, they are not twins.Why?

Introducing:Nison Candle Scannerfor the NinjaTrader Platform

Highlighting

Real Time Alerts

Scanning



Is it a valid

Nison candlesticksignal?

Is it a valid

Nison candlesticksignal?

Boost Your Candle Confidence

Is it a valid Nison Candlestick Signal?

?

?

Quickly see Small Windows

If I had only seen this!



Find Steve’sFavorite CandleSignals inSeconds

Find Steve’sFavorite CandleSignals inSeconds

1. NCS finds a bearish engulfing patternafter the close

2. Set up an alert if market gets to thisresistance level

If a candle signal confirms aWestern or another candle signal,the more likely a reversal

Eat- West Confirmation



After scanning through many markets NCS finds a hammer on this session-now we can decide on a potential strategy. What would you do and why?

Reasons for or against the potential trade Risk -why Target


The market will often retest thelower shadow of the hammer



Retest of hammer’s shadow

Set up an alert

Strict - Tightened thecandle pattern criteriaso you'll have greaterconfidence in thereversal signals



• Market in an uptrend

• Black candle that opens overprior close and gets 50% ormore into white real body

STRICT CRITERIA• Two session pattern


• Black candle that opens overprior high and gets 50% ormore into white real body



NCS Strict Criteria

Exit here@$93

This alone saved you$1100 on 100 shares!

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Confirmation

Two Kinds of ConfirmationTwo Kinds of Confirmation

East + West

Price Confirmation

East + West Confirmation

Where a candle

signal confirms a

Western technical

signal

East + West

Which of these piercingpatterns picked up by NCSwould you be more aggressiveon and why?




Doji – but also a new high close

12

3

What about this doji?

confirmed


Candles and Price Confirmation

Plus of price confirmation:Improve odds of hammer working,But…

Price Confirmation Cautions

Consider buy/sell stop limits

Remember risk/reward!

Depends on your trading style

Higher probability at cost ofprofit potential




Candles and Price Confirmation

Improve odds of hammer working,But at cost of higher entry price

Price confirmation


Price confirmation cautions

Consider buy/sell stop limits

Remember risk/reward!

Depends on your trading style

Higher probability at cost ofprofit potential

Hammer

Confirmed




Which ofthese twoscenarios isit moreimportantto havebearishpriceconfirmationof the doji?

Note: this will nothappen in FX


Doji and Price Confirmation

New highclose and bullshadow. Bearconfirmation thusmore important

confirmed


Because a doji ora spinning top in FX willbe near the prior sessionclose you may want towait for bear confirmation




Forex doji and Price Confirmation

Why would you not be toonervous on this doji?

confirmed


Price confirmation

No price confirmationafter this bullishengulfing pattern

Price confirmation afterthis bullish engulfingpattern, but risk is still toclose under low ofpattern

Why didn’tI have thiswindow asresistance?


Price confirmation

If you waited for the closeof session of the bull engulf

look at what price youwould be buying.





• Market in downtrend

• Open of white candle under prior close

• White candle closes more than ½ way intoblack real body.

STRICT CRITERIA• White candle opens under prior low

• Long black and tall white candle

PATTERN PSYCHOLOGYBears in control is echoed by long darkcandle. Sharp gap lower means bears have astrong foothold. But with sharp bounce backby end of the session the market has“displayed uneasiness at a low price.” Thebears now sense danger.


Piercing pattern as support


Piercing Pattern

Not Piercing Patterns

Although first candle wasn’tlong black what pattern is this?

And this?




Piercing Pattern

For intraday okay tohave open at- or veryclose- to prior close

Not a piercing pattern



• Downtrend but even with no apparent trendwould be a positive signal

• Black real body followed by a long whitereal body that gaps lower on the open andthen closes at or near black candle close.

• 2nd candle tall white

STRICT CRITERIA• Both candles are large (very rare)

PATTERN PSYCHOLOGYWith the gap down bears are relieved. The“bulls are backed into a corner and cameout fighting in a heroic fight. Kamikazefights are always frightening, so the bearsseeing this take to the sidelines and thebulls may get reinforcements.”


Bull Counter Attack

BullCounterAttack

What do you thinkthe bears are thinking

after this session?




Early clues of shifting supply/demand


BASIC CRITERIA• Market in downtrend, but trend not critical

• First candle unusually long dark candle

• Second candle is much smaller than 1st candle (about25% or less).

• 2nd candle can be the same- or opposite color- of firstcandle

• 2nd real body is within 1st candle’s real body

STRICT CRITERIA• Second candle white real body

• Second candle gets 50% or higher into first candlereal body

PATTERN PSYCHOLOGYThe long black candle echoes the heaviness of supply.But the next session’s gap up and lack of downsidefollow through results in the bears seeing that theirdrive is becoming impeded.


20027 14 22 28 4

February11 19 25 4

March

40.0

40.5

41.0

41.5

42.0

42.5

43.0

43.5

44.0

44.5

45.0

45.5

46.0

46.5

47.0

47.5

48.0

SEMICNDCTR HLDRS ADR

Bull Harami




Bullish Harami


Bull Harami and Volume

PotentialSellingclimax


BASIC CRITERIA• Trend not important

• Black candle followed by white candle thatopens within black real body and closes overprior open.

STRICT CRITERIA• Both long real bodies

• 2nd candle closes over prior high

• White real body closes at, or near, its highs

PATTERN PSYCHOLOGYThe surprise gap higher opening on thesecond day after a strong selling sessionmay initially be of minor concern. But withthe white candle’s strong close the bearssense danger and also gives the bulls causefor optimism.




Bull Sash Pattern

Bull Sash


Risk/Reward

Bull Sash

Bull Sash

Both of these are poor trade candidates



• Black candle followed by white candle that opens at(or above) prior open. Then closes over black candleopen.

STRICT CRITERIA• Both long real bodies (rare)

• White real body closes at, or near, its highs

PATTERN PSYCHOLOGYWhile the bears may be surprised to see the market

gapping sharply higher from a prior weak session,

imagine their fear (and the bulls happiness) as the

market continues its advance without hesitation the

next session. The tide of the market has changed

from one to which the bears were in control to one

where the bulls are now calling the shots.




Bull Separating line





BASIC CRITERIA• Market in an uptrend

• Black or White real Body

• Small real body at, or near, bottom of range.

• Upper shadow at least 2x height real body

“A crack has entered the market”

STRICT CRITERIA• Black real body

• No lower shadow

PATTERN PSYCHOLOGYThe strong retreat from higher prices shows eitheror/and:

1) bulls stepping back at higher levels

2) bears getting more aggressive

The result is that the bulls have second thoughts oftheir power and bears now have encouragement.


Candles in Context -Shooting star

Why would youwait for priceconfirmation?


Shooting Star with Price Confirmation

confirmed




Price Confirmation

If a candle signal confirms a western signal there isless need for price confirmation




• Black real body wraps around light realbody

STRICT CRITERIA• Small first candle small white or doji

• Second candle is long dark that wrapsaround high-low range of first candle.

PATTERN PSYCHOLOGY• Small first candle reflects rallying could be

running out of steam

• Long black candle visually shows the bearsare now the controlling force.


Misinformation can cost you Big $$$




Candles as Support

S1


Momentum Trading


Candles and Momentum – trading the breakouts




Price confirmation

Since real bodies are nearly thesame size would prefer

east/west or price confirmation.

Confirmationwith lower close

but riskstill to high of

pattern


Price confirmation

Since pattern confirmed resistance less reason for priceconfirmation- but it depends on you trading style.


1) What pattern is this?2) What happened before the bearish pattern above that

signaled the market was stalling?

Chart Challenge




• Market in uptrend

• Open of black candle higher than prior close

• Black candle closes into white candle

STRICT CRITERIA• Black candle closes more than 50% into white

real body

• Black candle opens above prior high

• Tall white and black candles

PATTERN PSYCHOLOGYWhite candle and then gap higher keeps bullshappy. But with black candle finishing wellbelow white candle’s close the “upwardenergy has cooled to the extreme” causingthe bulls to become concerned and bearsbolder.


Dark Cloud Cover

Not dark cloud cover

Chart courtesy of Genesis FT

Is this tellingyou that there

is a shift inpsychology?


Dark Cloud Cover defines Resistance




Dark Cloud Cover at resistance

Why is thisnot a bullishengulfingpattern?


Dark Cloud Cover and momentum


Dark cloud rains pain for the bulls

Think thereis trouble

near $410?Happy time forthe bulls- new

high close!

“Oh crap!”




• Uptrend but even with no apparent trendwould be a cautionary signal

• White real body followed by a black realbody that gaps up on the open and thencloses at or near white candles' close

STRICT CRITERIA• Both candles are large (very rare)

• Large black real body

PATTERN PSYCHOLOGYWith the tall white, and especially with thegap higher next session the bulls are happy.But then a strong bear counter force comesin to drag the market back to the priorclose. The tone of the market now shiftsfrom bullish optimism to uncertainty.


Bear Counter- Attack

Bull Counter Attack?

While this is not a bearcounter attack since thecloses are not the same- doyou think there is a change inpsychology after this session?


BASIC CRITERIA• Market in uptrend, but trend not critical

• First candle unusually long white candle

• Second candle is much smaller than 1st candle(about 25% or less).

• 2nd candle can be the same- or opposite color- offirst candle

• 2nd real body is within 1st candle’s real body

STRICT CRITERIA

• Second candle black real body

• Second candle gets 50% or below first candle’s realbody

PATTERN PSYCHOLOGYThe indications based on the tall white candle’svitality is for the rally to continue, But next session’sgap down and then failure to resume the advance tobeyond the prior session shows those who hadforecast strength are wrong! The rally could now berunning out of fuel.




Bear Harami

Not BearHarami

Because theseare near thehighs of theprior candlewould wantbear candle

confirmation


• White candle followed by black candle thatopens within white real body and closesunder prior open.

STRICT CRITERIA• Both long real bodies

• 2nd candle closes under prior low

• Black real body closes at, or near, its lows

PATTERN PSYCHOLOGYThe white candle means the bulls are runningthe show. And then the next session themarket gaps lower and is not only unable tomake it this lost ground, but closes under thewhite candle. This shows the bullish energyhas been sapped out of the market resultingin very scared bulls.


Bear Sash

Bear Sash




Bear Sash

Bear Sash


Being a Market Chameleon

Bull Sash

Bear Sash



• White candle followed by black candle that opens at(or below) prior open. Then closes under whitecandle’s open.

STRICT CRITERIA• Both long real bodies (rare)

• Black real body closes at, or near, its lows

PATTERN PSYCHOLOGYWith the gap down on 2nd day the bulls sensedanger. And then to make matters worse for them,the market can’t even make up for the ground loston the opening. The tide of the market momentumhas now turned down.




Bear Separating line


Bear Separating Line


Bear Separating line




“Japanese charts have meaning in asingle candle, and when two candlesare combined the meaning becomesmore significant.”

Source: KABUSHIKISOUBA NOTECHNICAL BUNSEKI – G.Ikutaro

A blended candle is a way of “compressing” combinationsof candle lines into as if they made one candle

open 1

close 2 =

1) Use open of the first session for open of blended candle

2) Use close of the last session of pattern for close ofblended candle.

3) Use highest high and lowest close of all sessions forupper and lower shadows of blended candle.

How do we make a Blended Candle?



think of Blended candle as a “Summary candle” of thepattern analyzed. How does this help?

1- To determine if a patternis net bullish or bearish

2- To compare variations of candlepatterns to determine the strength ofthe signal

Classic dark cloudcover

How is this non classic darkcloud cover different and whatdoes it mean to outlook?www.candlecharts.com






Longer Term Trend

20 day m.a over50 day m.a

Candles in Context

A rising window is support

SupportZone

Most importantsupport level




A falling window is resistance

ResistanceZone

Most importantresistance level


Change of Polarity

Support Support

ResistanceResistance




Windows and Change of Polarity

The most importantaspect is the many

times this resistancewas tested- (which

may have to do withthe window)

© Steve Nison’s Candlecharts.com

“To knowwhere youstand is as

important ascandle patternrecognition.”




Candles in Context

Bear momentum trade

Why would you notbuy on this pattern?

A candle signal – even if itconfirms other indicators – is notenough of a reason for a trade.You must always considerrisk/reward


Candles in context

Wow- three hammers!




Importance of Education

Hammer


Bull Separating Line


Looks good on the outside!

This is a poor trade candidate- why?





Bull separating but lookwhere it is!


Exit Strategies

Protective Stops

Time Stops

Trailing Stops

© Steve Nison’s Candlecharts.com

Slide 144

The race is not always to theswiftest, but to those who keeprunning.





Hammer

How Education Saves you $$$$

How Education Saves you $$$$




If the market does not act asexpected within about fivesessions then considerexiting


Time Stops

Bearish engulfing patternConfirms resistance

What are you doinghanging around!

Time to short





Trailing Stops

As the market movesin your direction –stop is adjusted tohelp ride the trend.


“Golden” and “Dead” CrossesCompares two moving averages

GOLDEN CROSS: shorter crosses above longer DEAD CROSS: shorter crosses under longer


Answer: 3 and 12 day




Trailing stops - letting the profits run

Fallingwindow

ShootingStar

You sold at shootingstar or falling window.

A rally from a bullharami gets you

nervous and you exit.But you’re still playing

with the market’smoney- so another

option: trailing stop….


Falling window

ShootingStar

Where you got nervous

Trailing stops - letting the profits run


Trailing Stops to let profits run

Buy and setprotective stop

Potential Target

Now at target-Doji warns of

caution. But youwant to letprofits run.




Trailing Stops to let profits run

doji

Trading Journal



Trading Journal

Goals:1) Keeping emotions out of your trading2) Education

Do the Trade? Reasons for the trade Entry Price Risk Initial Target Number of shares or contracts

Exit price Why did you exit Print out (or cut and

paste) chart – did youfollow your plan? Didyou miss anything?


Trading Journal- Sample

Reasons for thetrade

Entry Price Risk Initial Target

Setting up the Trade – part 1

Find a watch listof markets withNCS

Reasons for thepotential trade

Cautions Risk Target



Exiting the Trade – part 2

sold

Covered at supportbefore weekend

Special seminar attendee COUPON CODE Pricing andbonuses END this Wednesday at midnight

Regular Price - $1,695 per year

Special price – $1,695 for lifetime access

BONUS DISCOUNT: Enter coupon code NCS 500 and save another $500=$1,195

lifetime

Enter Code NCS500

This means you aregetting full LIFETIMEsubscription for LESSthan the cost of anannual subscription

www.nisoncandlescanner.com/special


Advanced Express Class

NCS Special: www.nisoncandlescanner.com/special (be sure to use your specialdiscount code)

Access to recording of this session: log into your CCA account.

Registration: Markets of Choice – April 9 at 8:30 NY time (will be recorded)

Register at: https://attendee.gotowebinar.com/register/1895743129361646594

[email protected]



Not all day are equal- does a doji confirm a western signal, or if the doji is at a new high for the move the safer to waitfor bear confirmation.

Use doji as resistance and as such can use moves above it for momentum trades

White real body/shadow progress shows strongest to weakest white real body candles

Black real body/shadow progress shows weakest to strongest black real body candles

Strict criteria candles signals tighten up the candle definitions to give higher probabilities

There are two kinds of candle confirmation:

East + West – where a candle signal confirms a western indicator

Price confirmation- where price action confirms a candle signal.

For price confirmation- get higher probability of trade working, but usually at the cost of higher entry price

Blended candles are a way to combine two or more candle lines into one candle line to use to analyze the strength orweakness of those candle lines.

Use longer term trend to position direction of new trade. Steve likes to use 20 and 50 day simple moving averages

Always consider risk/reward of any trade

Always use protective stops

For trailing stops on can use 3 and 12 day simple moving averages

Set up and use a Trading Journal to learn what you did right/wrong.

Use NCS to quickly find Steve’s favorite candle signals in any market and then look if the markets it finds present a goodtrading opportunity (i.e., does the candle signal confirm a western indicator, is it a good risk/ reward trade)

Documents

Advanced Express Class new - Amazon S3Express+Cla… · Steve Nison’s ADVANCED Candlestick EXPRESS Class WithSteve Nison, CMT President: Candlecharts.com Advanced Candlestick Charting