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The Nison Candlestick Summit – Day 1 www.candlecharts.com 1 The Candlestick Summit Reaching the top levels of Nison candlesticks- Day 1 Candlestick Charting Strategies Candlesticks + Western Indicators Candlesticks + Trade Management Approximate Time Line Day 1 9-12 Neutral and Bullish Advanced Candlesticks Break 10:15 Lunch 12-1 1-4 Advanced Bear Candlesticks Break 2:15 Day 2 9-12 Candlesticks + Advanced Western Indicators Break 10:15 Lunch 12-1 1-4 Candlesticks + Advanced Trade Management Break 2:15 Note: will be interspersing using Nison Candle Scanner throughout the session

The Candlestick Summit - Candlestick Charts - Learn ... Nison Candlestick Summit – Day 1 4 INTRODUCING STEVE NISON’S 360 CANDLE ANALYSIS New – Strict criteria of a candle signal

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Page 1: The Candlestick Summit - Candlestick Charts - Learn ... Nison Candlestick Summit – Day 1 4 INTRODUCING STEVE NISON’S 360 CANDLE ANALYSIS New – Strict criteria of a candle signal

The Nison Candlestick Summit – Day 1

www.candlecharts.com 1

The Candlestick SummitReaching the top levels of Nison

candlesticks- Day 1

CandlestickCharting

Strategies

Candlesticks +Western

Indicators

Candlesticks + Trade Management

Approximate Time Line

Day 1

9-12 Neutral and Bullish Advanced CandlesticksBreak 10:15

Lunch 12-1

1-4 Advanced Bear CandlesticksBreak 2:15

Day 2

9-12 Candlesticks + Advanced Western IndicatorsBreak 10:15

Lunch 12-1

1-4 Candlesticks + Advanced Trade ManagementBreak 2:15

Note: will be interspersing using Nison Candle Scanner throughout the session

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The Nison Candlestick Summit – Day 1

www.candlecharts.com 2

THE 3 CHALLENGES

1. When to Enter

2. When to Exit

3. Which Markets

Solution:Use Software

to Quickly Find a Watch List

Contact Paul for info

© Steve Nison’s Candlecharts.com

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”Any trader who relies oncandlestick charting will find[NCS] a fast, flexible, andefficient tool that could add totheir trading effectiveness”

“I was quickly and easily able to implement allof the features of the NCS software. And thatit was coupled with the free Ninja Trader wasespecially helpful.

NCS saves time for quicker and timelieranalysis potentially leading to better trades,fewer losses, and more profitability. A toolsuch as this that provides quick and accurateanalysis is a trader’s dream.”

– Mark Kowalkowski

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The Nison Candlestick Summit – Day 1

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WWW.CANDLECHARTS.COMWWW.CANDLECHARTS.COM

INTRODUCING STEVE NISON’S 360° CANDLE ANALYSIS

New – Strict criteriaof a candle signal

New – Detailed psychologybehind each signal

New – Momentumtrading with candles

New – Candles assupport/resistance

New – NisonInsights

New – Priceconfirmation of a

candle signal

New – Patternin FX and

non FX

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

pips)

• Market trending up or down

• Also called a cross

• Doji in a rally called Northern doji

• Doji in a decline called Southern doji

“A time to wait without a position in the market”

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.

• Markets can sink of their own weight (i.e. don’t needsellers to pull markets lower- lack of buyers will dothat) a doji hints buyers are now starting to absorbsupply.

• The market is at a delicate turning period and couldgo either way.

1

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www.candlecharts.comwww.candlecharts.com

If early in uptrends/downtrends, or middle of a box rangedoji not important

www.candlecharts.comwww.candlecharts.com

Doji and Prior Move

Is the marketoverextendedat these doji?

www.candlecharts.comwww.candlecharts.com

This doji is showing ashift in psychology since itcomes during a rally

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

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Doji in a Box Range

www.candlecharts.com

Chart courtesy of Genesis FT

If flat, what would you do at doji lines at 1,2 and 3 and why?

1

2

3

1

2

www.candlecharts.com

Nison Case Study

www.candlecharts.comwww.candlecharts.com

This doji is showing ashift in psychology since itcomes during a rally

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

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If early in uptrends/downtrends, or middle of a boxrange doji not important

Spinning tops and doji could be just a pause to acontinuing trend

www.candlecharts.com

The pause that refreshes?

www.candlecharts.comwww.candlecharts.com

If early in uptrends/downtrends, or middle of a boxrange doji not important

Spinning tops and doji could be just a pause to acontinuing trend

Don’t forget shadows

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Analyze shadows. Interpretation will differ on the type ofupper and lower shadows.

Center Doji = Equal length shadows

Most classic doji where bulls and bears are inbalance

Upper Shadow Doji:Unsustainable buying strength

Lower Shadow Doji:Some buying strength left in the market

Source: Kabushiki Keisen no MikataTsukaikata Toshika No Tame NoSenryakuzu- Kichitaro Kisamori

www.candlecharts.comwww.candlecharts.com

If early in uptrends/downtrends, or middle of a boxrange doji not important

Spinning tops and doji could be just a pause to acontinuing trend

Don’t forget shadows

Confirmation is important since market at tippingpoint.

Confirmation

Two Kinds of ConfirmationTwo Kinds of Confirmation

East + West

Price Confirmation

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Using a move after the initial candle signal to validate signalUsing a move after the initial candle signal to validate signal

Price Confirmation

Can be a close (or open) above (for bullcandle signal) or below (for bear candlesignal) the close of candle signal.

Less important if have East/Westconfirmation

Less important for momentum trades

The more ideal the candle pattern theless important the candle confirmation

www.candlecharts.com

Candles and Price Confirmation

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

www.candlecharts.com

Candles and Price Confirmation

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

Price confirmation

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Price Confirmation Cautions

Consider buy/sell stop limits

Remember risk/reward!

Depends on your trading style

Higher probability at cost ofprofit potential

www.candlecharts.com

Price confirmation cautions

Consider buy/sell stop limits

Remember risk/reward!

Depends on your trading style

Higher probability at cost ofprofit potential

Hammer

Confirmed

www.candlecharts.comwww.candlecharts.com

Which ofthese twoscenarios isit moreimportantto havebearishpriceconfirmationof the doji?

Note: this will nothappen in FX

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Doji and Price Confirmation

New highclose and bullshadow. Bearconfirmation thusmore important

confirmed

www.candlecharts.comwww.candlecharts.com

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

www.candlecharts.com

Forex doji and Price Confirmation

Why would you not be toonervous on this doji?

confirmed

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Doji – but also a new high close

12

3

What about this doji?

confirmed

www.candlecharts.comwww.candlecharts.com

Which ofthese twoscenarios isit moreimportantto havebearishpriceconfirmationof the doji?

www.candlecharts.com

Doji and Shadows

Bull shadow

Equal shadows

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Criteria: Use the highesthigh of those two sessions(top of upper shadow) asresistance

Implication: Close over thatarea: market is “refreshed”.That is when we considerthe bull momentum trade

www.candlecharts.comwww.candlecharts.com

Doji and Momentum

Doji as resistance

www.candlecharts.com

Doji and momentum trading

“Market refreshed”

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www.candlecharts.com

Rolling up with calls

Mkt @ 90.5Buy 90 call @ 3.35

5 days later getting nervous.Mkt @ 94 ½Sell to close 90 call @ 5.70Use $2.35 profit andbuy 96 call @ $.2.75

Breakout! Buy a call.No need to limitprofit potential

Presented by Steve NisonPresident: candlecharts.com

Quickly finding the best opportunities in the options markets

Las Vegas, Sat/Sun- June 4 & 5

FIRST TIME EVER!

www.candlecharts.com

Doji and momentum trading

Doji confirmingresistance

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www.candlecharts.com

Session with long upper and lowershadow compared to real body

www.candlecharts.com

© www.candlecharts.com

Neutral Sessions

1 2 3 4 5 6 7 8 9 10

Very Strong Sessions Strong Sessions Bearish Sessions

More Bullish

© www.candlecharts.com

Less Bullish/Bear

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© www.candlecharts.com

# Name Characteristics Nison Notes

1Tall whitedouble crew cut(Yorikiri)

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

© www.candlecharts.com

# Name Characteristics Nison Notes

2Tall white closingcrew cutYorikiri)

Small lower shadow

Lower shadowshows market can

break underopening price

1 2 3 4 5 6 7 8 9 10

More Bullish Less Bullish/Bear

Neutral SessionsVery Strong Sessions Strong Sessions Bearish Sessions

© www.candlecharts.com

# Name Characteristics Nison Notes

3Power line(hammer)

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

1 2 3 4 5 6 7 8 9 10

More Bullish Less Bullish/Bear

Neutral SessionsVery Strong Sessions Strong Sessions Bearish Sessions

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© www.candlecharts.com

# Name Characteristics Nison Notes

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

More Bullish Less Bullish/Bear

Neutral SessionsVery Strong Sessions Strong Sessions Bearish Sessions

© www.candlecharts.com

# Name Characteristics Nison Notes

5Small whitewith bullshadow

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

1 2 3 4 5 6 7 8 9 10

More Bullish Less Bullish/Bear

Neutral SessionsVery Strong Sessions Strong Sessions Bearish Sessions

© www.candlecharts.com

# Name Characteristics Nison Notes

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

More Bullish Less Bullish/Bear

Neutral SessionsVery Strong Sessions Strong Sessions Bearish Sessions

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© www.candlecharts.com

# Name Characteristics Nison Notes

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

More Bullish Less Bullish/Bear

Neutral SessionsVery Strong Sessions Strong Sessions Bearish Sessions

© www.candlecharts.com

# Name Characteristics Nison Notes

8White spinningtop

Can have upper and lowershadows less than 100% ofreal body

“A driftingmarket”

1 2 3 4 5 6 7 8 9 10

More Bullish Less Bullish/Bear

Neutral SessionsVery Strong Sessions Strong Sessions Bearish Sessions

© www.candlecharts.com

# Name Characteristics Nison Notes

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

More Bullish Less Bullish/Bear

Neutral SessionsVery Strong Sessions Strong Sessions Bearish Sessions

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© www.candlecharts.com

# Name Characteristics Nison Notes

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

1 2 3 4 5 6 7 8 9 10

More Bullish Less Bullish/Bear

Neutral SessionsVery Strong Sessions Strong Sessions Bearish Sessions

www.candlecharts.com

YORIKIRI (TALL) CANDLES

www.candlecharts.com

1st support(50% of entirecandle)

2nd support

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YORIKIRI (TALL) CANDLES

Very Long Real Bodies as Support

Middle Tall White Candle

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© www.candlecharts.com

More Bearish Less Bearish/Bullish

1 2 3 4 5 6 7

8

9 10

Neutral SessionsWeak Sessions Bullish SessionsVery Weak Sessions

© www.candlecharts.com

1 2 3 4

5

6 7

8

910

More Bearish Less Bearish/Bullish

# Name Characteristics Nison Notes

1Long blackdouble crew cut

No shadows

© www.candlecharts.com

More Bearish Less Bearish/Bullish

1 2 3 4 5 6 7

8

910

# Name Characteristics Nison Notes

2Long blackclosing crew cut

Small Upper shadow

Upper shadowshows market

push overopening price

Neutral SessionsWeak Sessions Bullish SessionsVery Weak Sessions

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© www.candlecharts.com

More Bearish Less Bearish/Bullish

1 2 3 4 5 6 7

8

910

# Name Characteristics Nison Notes

3 Shooting StarShadow 2x or more real

body. Can have very smalllower shadow.

Neutral SessionsWeak Sessions Bullish SessionsVery Weak Sessions

© www.candlecharts.com

1 2 3 4 5 6 7

8

910

# Name Characteristics Nison Notes

4 Long blackLower shadow 25% or less

real body

Lower shadowshows demandat lower prices

Neutral SessionsWeak Sessions Bullish SessionsVery Weak Sessions

More Bearish Less Bearish/Bullish

© www.candlecharts.com

More Bearish Less Bearish/Bullish

1 2 3 4 5 6 7

8

910

# Name Characteristics Nison Notes

5Small black withbear shadow

Upper shadow less than 2xreal body. Can have very

small lower shadow.

Neutral SessionsWeak Sessions Bullish SessionsVery Weak Sessions

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© www.candlecharts.com

More Bearish Less Bearish/Bullish

1 2 3 4 5 6 7

8

910

# Name Characteristics Nison Notes

6Medium lowershadow long black

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

Showingincreasing

demand and pricerejection at lower

levels

Neutral SessionsWeak Sessions Bullish SessionsVery Weak Sessions

© www.candlecharts.com

More Bearish Less Bearish/Bullish

1 2 3 4 5 6 7

8

910

# Name Characteristics Nison Notes

7Long lowershadow black

Same as 4 but lower shadowmore than 100% of real

body

Rare candle –‘”Gives slight

fearful feeling”to bears

Neutral SessionsWeak Sessions Bullish SessionsVery Weak Sessions

© www.candlecharts.com

More Bearish Less Bearish/Bullish

1 2 3 4 5 6 7

8

910

# Name Characteristics Nison Notes

8Black spinningtop

Can have upper and lowershadows less than 100% of

real body

“A driftingmarket”

Neutral SessionsWeak Sessions Bullish SessionsVery Weak Sessions

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© www.candlecharts.com

More Bearish Less Bearish/Bullish

1 2 3 4 5

8

910

# Name Characteristics Nison Notes

9Small black withbull shadow

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

small upper shadow.

Neutral SessionsWeak Sessions Bullish SessionsVery Weak Sessions

© www.candlecharts.com

More Bearish Less Bearish/Bullish

1 2 3 4 5 6 7

8

910

# Name Characteristics Nison Notes

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

upper shadow.

Neutral SessionsWeak Sessions Bullish SessionsVery Weak Sessions

www.candlecharts.com

2nd

resistance

1st

resistance(50% of entirecandle)

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YORIKIRI (TALL) CANDLES

Very Long Real Bodies as Resistance

The

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Black or white candle with long lowershadow compared to real body.

www.candlecharts.com

Basic Criteria• Market in a downtrend

• Small real body (either color) at, ornear, top of range.

• Lower shadow at least 2x height realbody

Market Implication“A chance to buy at the bottom “

SupportLow of hammer as support

www.candlecharts.com

www.candlecharts.comwww.candlecharts.com

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).

SUPPORT/MOMENTUM TRADING

• Low of hammer as support

• Consider shorting under low ofpattern.

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White real body hammer is called a“Power Candle”

Can have small upper shadow (around10% of lower shadow)

The more oversold and the longer theshadow, the higher degree ofconfidence

Often a retest of lower shadow

Bullish counterpart of Shooting Star(not a Hanging Man).

A hammer with a open/high/close athigh is a Dragonfly doji

As a single candle line it is same in FXas other markets

www.candlecharts.com

Hammer and trend

Power line

Not a hammer

www.candlecharts.com

Hammer As Support

Willoftenretestlower

shadow

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Hammer – Stops/Momentum

Exit (or short)

www.candlecharts.comwww.candlecharts.com

Hammers and Stops/Momentum

Hammer near support

Protective stop ormomentum trade

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No need to learn allNinja! Just a few simpletools from Ninja to fullyuse NCS.

No software to deliver. 1)download 2) get licenseapproved and then you’re ready!

Text or video versions ofUser Manuals

Find Steve’sFavorite CandleSignals inSeconds

Find Steve’sFavorite CandleSignals inSeconds

Accelerate your AnalysisAccelerate your Analysis

BASIC CRITERIA• Market in downtrend

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

• Must come at new low for move or significantdecline

• Upper shadow at least 2x height real body

PATTERN PSYCHOLOGYWhile the market closes at, or near itslow, it has shown an ability to rise. Thismay get the bears slightly nervous.

SUPPORT/MOMENTUM TRADING

• Not used as support

• Momentum: Trend is still down withthis signal

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Same as the shooting star exceptmarket in a downtrend

Can have small lower shadow (around10% of lower shadow)

Must have bull confirmation with ahigher close, or for those moreaggressive, a higher opening

This is not the bullish counterpart ofShooting Star. The Hammer is thebullish counterpart.

Because of the bearish shadow do notplace much emphasis on this signal.

www.candlecharts.comwww.candlecharts.com

Importance of Price Confirmation

While a typical candle signalrequires less candle confirmationif at support/resistance with thissignal (and hanging man) youalways need candle confirmation

www.candlecharts.com

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www.candlecharts.com

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BullishCounterAttackPattern

PiercingPattern

BullishEngulfing

Pattern

BullSash

Pattern

BullSeparating

Line

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Black real body followed by a white realbody that gaps lower on the open andthen closes at, or near, black candleclose.

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BASIC CRITERIA• Two session 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.”

SUPPORT/MOMENTUM TRADING

• Not used as support or resistance.

• Consider selling on move under lowof pattern.

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No pattern like this for FX sincethe market gaps lower.

While the ideal pattern is both largereal bodies, we would still view thisas important even if only the whitecandle was large

Closes do not have to be exactlythe same

Opposite of bearish counter attack

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Bull Counter Attack

BullCounterAttack

What do you thinkthe bears are thinking

after this session?

PS- watch yourlanguage!

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White real body that wraps aroundprior session black real body or doji.

www.candlecharts.com

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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.

SUPPORT/MOMENTUM TRADING

• Lowest low of either candle assupport

• Consider shorting under low ofpattern.

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For FX, intraday and indexes can have thesame open (or within 2 pips for FX) of priorclose

The pattern has less significance if the realbodies are about the same size.

First candle can be doji

Candles in Engulfing Pattern (large wrapsaround small candle) are opposite those inHarami Pattern (small candle in a largecandle)

If Bullish Engulfing pattern appears duringrally Japanese call it a “last engulfingpattern and may be buying climax.Confirmation close under close of whitecandle. This is not an important pattern, justthink about not buying.

FX Pattern

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This is interesting: I recently purchased atechnical analysis package from a“WELL KNOWN” technical analysisguru. During his charting presentationhe made several references tocandlestick patterns, and eachreferences that he made was absolutelywrong! …During a strong uptrend, hecalled a large white real body after asmall black real body a bullish engulfingpattern. If I remember right – a bullishengulfing pattern doesn’t count during anuptrend. If I hadn’t bought and studiedyour package, I never would have knownthat and would have assumed that hewas right.

Thanks again for your great work!Carl

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Bullish Engulfing Patterns

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Price confirmation

No price confirmationafter this bullishengulfing pattern

Price confirmationafter this bullishengulfing pattern,but risk is still tolow of pattern

Why didn’tI have thiswindow asresistance?

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Price confirmation

If you waited for the closeof session of the bull engulf

look at what price youwould be buying.

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Momentum trade

Bear momentum trade

Why would you notbuy on this pattern?

Small real body inside an unusuallylong black real body.

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BASIC CRITERIA• Two session pattern

• Market in downtrend, but trend not critical

• First candle unusually long dark candle

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

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

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

PATTERN PSYCHOLOGYThe long black candle echoes the heaviness ofsupply. But the next session’s gap up and lackof downside follow through results in the bearsseeing that their drive is becoming impeded.

SUPPORT/MOMENTUM TRADING

• Not used as support (unless 2nd

candle is reversal signal (i.e.hammer)

• Not used for momentum trading

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For FX, intraday and indexes can havethe same (or within 2 pips for FX) openas prior close

If the 2nd candle is a doji, the pattern iscalled a harami cross

The more the 2nd candle gets deeplyinto the black candle the better thesignal.

Because FX, etc, white candle can’t getdeeply into black real body it is best towait for bull confirmation by a higheropen or close than the white real body.

In general the less the 2nd candle getsinto the black candle the moreconfirmation is needed.

Opposite of bearish harami

FX Pattern

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Bull harami

Think the market isdifferent on thissessioncompared to priorsession?

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Bull Harami

PotentialSellingclimax

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Bull Harami and momentum trading

MomentumTrade

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BASIC CRITERIA• Two session pattern

• 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.

SUPPORT/MOMENTUM TRADING

• Lowest low of both candles assupport

• Consider selling on move undersupport level

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For FX can have the same (or within a few 2pips) open as prior close

Long black and then long white showsextreme shift in psychology

The more the white candle opens underprior low /close the better the signal (fornon FX).

Opposite of dark cloud cover

Related patterns which need not beremembered are on-neck (atekubi), in-neck(irikubi) and thrusting (sashikomi).

FX Pattern

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Piercing pattern as support

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Piercing Pattern

Not Piercing Patterns

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

And this?

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Piercing Pattern

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

Not a piercing pattern

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Early clues of shifting supply/demand

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Black candle followed by white candlethat opens within black real body andcloses over prior open.

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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.

SUPPORT/MOMENTUM TRADING

• Lowest low of both candles assupport

• Consider selling on move under lowof pattern

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Since the market has to gap higherthis pattern not applicable to FX.

The higher the market gaps on theopen, and the higher the close on thewhite candle the more meaningful thepattern

Remember risk/reward since thispattern is completed after substantialmove has already occurred.

Opposite of Bear Sash pattern

If open of white candle is same (orhigher) as prior open, it is a BullSeparating Line.

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Bull Sash Pattern

Bull Sash

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Risk/Reward

Bull Sash

Bull Sash

Both of these are poor trade candidates

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BASIC CRITERIA• Trend not important

• 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.

SUPPORT/MOMENTUM TRADING

• Lowest low of both candles assupport

• Consider selling on move under lowof pattern

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Easy way to remember this pattern isthe opens are the about the same (orthe 2nd candle open gaps away from 1st

candles open.)

Since the market has to gap higherthis pattern not applicable to FX.

Major challenge with this pattern issince it is completed after substantialmove, it usually means poorrisk/reward.

Opposite of Bear Separating Pattern

If open of white candle is within priorblack real body, it is a Bull SashPattern.

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Bull Separating line

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Looks good on the outside!

This is a poor trade candidate- why?

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Bull Separating line

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Bull Separating line

Bull separating but lookwhere it is!

TWEEZERS BOTTOMTWEEZERS BOTTOM

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Two candles that have the same lows.First candle large black.

Source: HAJIMETE KABUKA CHATO WO YOMU HITO NOHON by K. Hoshi

CRITERIA• Two candles with matching highs (tweezers

top) or lows (tweezers bottom)

• Uptrend for tweezers top and downtrendfor tweezers bottom. But trend not critical.

• The first candle must be a long white(tweezers top) or long black (tweezersbottom)

• 2nd candle must reflect diminishing of priorforce

PATTERN PSYCHOLOGYThe first candle shows bulls (tweezers top)or bears (tweezers bottom) are dominating.With the second candle showing an inabilityto continue the move implied by the firstcandle, we are starting to see the power ofthe prior trend dissipating.

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The more the 2nd candle closes into thefirst candle the better the signal.

This is a minor pattern unless there isa candle reversal signal that alsoemerges at the 2nd candle (i.e. piercingpattern, shooting star).

Not used as support or resistance ormomentum trading unless 2nd candle isa reversal candle.

If both candles for tweezers top closeat, or near the highs, or tweezersbottom close at or near the lows, thispattern would have less significance.

Source: HAJIMETE KABUKA CHATO WO YOMU HITO NOHON by K. Hoshi

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Tweezers Bottom

First candle long black, second candle small real body, third candleis white that gets deeply into first real body.

white or black

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FX

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Morning Star as support

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Abandoned Baby

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Almost abandoned baby

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RISING THREE METHODS

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A series of small candles inside therange of a tall white candle. The lastcandle is another tall white.

RISING THREE METHODS

Highlight Key - $79 value

NinjaTrader Trade Navigator Trade Station

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Three consecutive white candles,each with a higher close.

Three Soldiers

www.candlecharts.comFounder and President: Candlecharts.com

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A rising window is support

SupportZone

Most importantsupport level

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Small vs. Large windows

Smallwindow

Largewindow

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Importance of Windows

Shooting Star

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Quickly see Windows

If I had only seen this!

Change of Polarity

Support Support

ResistanceResistance

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Windows and Change of Polarity

The most importantaspect is the many

times this resistancewas tested- (which

may have to do withthe window)

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Windows and Confirmation

Closed under window by 2 and 9cents and next day opened andclosed over window again

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Three windows-note of caution

Secrets of Using Intraday Candle Charts toRefine Entries with Windows

For small windows – orwhen near the bottom oflarger windows – look forintraday candle reversals

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Using intraday candles toconfirm a Daily window

While the bottom of this window (reddashed line) did hold as support:1) Based on black candle it looked

dangerous to buy.2) By the end of the bull engulf day it

would have been a poor trade- why?

Bottom ofrisingwindow ondaily chart

Turn signal at$31.15 on this 30

minute chartcompared to

$31.60 on dailychart.

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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.

SUPPORT/MOMENTUM TRADING

• High of shooting star as resistance

• Consider buying above high ofpattern

1

2

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Black real body most important.

Can have small lower shadow (around 10%of upper shadow).

The more overextended the rally and thelonger the shadow, the higher degree ofconfidence.

Unlike a hammer, market doesn’t oftenretest upper shadow.

Bearish counterpart of Hammer (notInverted Hammer.)

A Shooting Star with a open/high/close atlow is a Gravestone doji.

As a single candle line this is the same inFX

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Shooting Star with Price Confirmation

confirmed

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Shooting star but no price confirmation

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How Education and NCS Helps Improve Profits

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BASIC CRITERIA• Market in a uptrend

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

• Must come at new high for move orsignificant rally

• Lower shadow at least 2x height real body

“Suggests a peak in the market”

PATTERN PSYCHOLOGYAlthough it may seem that the marketstill has rising power left, it has shownthat once the market has fallen, it hasbecome very fragile.

SUPPORT/MOMENTUM TRADING

• Not used as resistance

• Momentum: Trend is still up withthis signal

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Same as the hammer except market inan uptrend

Can have small upper shadow (around10% of lower shadow)

Must have bear confirmation with alower close, or for those moreaggressive, a lower opening

This is not the bearish counterpart ofHammer. The Shooting Star is thebearish counterpart.

Because of the bullish shadow, do notplace much emphasis on this signal.

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Pain!

1

2

4

3

5

Importance of Price confirmation

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Think this market had troubles near $8.20?

Tweezers top

Tweezers top

Why is this nota Tweezers

bottom?

CANDLE PROGRESSIONDESCENDING BLACK REAL BODY

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CANDLE PROGRESSIONDESCENDING BLACK REAL BODY

CANDLE PROGRESSIONDESCENDING BLACK REAL BODY

CANDLE PROGRESSIONDESCENDING BLACK REAL BODY

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CANDLE PROGRESSIONDESCENDING BLACK REAL BODY

CANDLE PROGRESSIONDESCENDING BLACK REAL BODY

BearishCounterAttackPattern

DarkCloudCover

BearishEngulfing

Pattern

BearSash

Pattern

BearSeparating

Line

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White real body followed by a black realbody that gaps higher on the open andthen closes at, or near, white candleclose.

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BASIC CRITERIA• Two session pattern

• 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.

SUPPORT/MOMENTUM TRADING

• Not used as support or resistance.

• Consider buying on breakout overhigh of pattern.

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No pattern like this for FX sincethe market gaps higher

While the ideal pattern is both largereal bodies, we would still view thisas important even if only the blackcandle was large

Closes do not have to be exactlythe same

Opposite of bullish counter attack

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Bear Counter Attack

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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?

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Black real body wraps around priorsession white real body or doji.

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BASIC CRITERIA• Two session pattern

• Market in an uptrend

• 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.

SUPPORT/MOMENTUM TRADING

• Highest high of either candle asresistance.

• Consider buying on breakout overhigh of pattern.

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For FX, intraday and indexes can have thesame (or within 2 pips for FX) open as priorclose

The pattern has less significance if the realbodies are about the same size.

First candle can be doji

Candles in Engulfing Pattern (large wrapsaround small candle) are opposite those inHarami Pattern (small candle in a largecandle)

If Bearish Engulfing pattern appears duringselloff Japanese call it a “last engulfingpattern and may be selling climax.Confirmation is a close above black candleclose. This is not an important pattern- justthink about not selling.

FX Pattern

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Misinformation can cost you Big $$$

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Candles as Support

S1

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Candles and Momentum – trading the breakouts

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Price confirmation

The less ideal the pattern themore candle confirmation

is needed.Why is this bearish engulfing

pattern less than ideal?

Confirmationwith lower close

but riskstill to high of

pattern

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Price confirmation

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