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 Shadow
close open

Real
Body

open close
low

Real Bodies / Shadows Doji

 Drawing Candle Lines

session open high low close 28

1 23 26 21 25 27
26
2 26 28 23 27
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

session open high low close 28

1 23 26 21 25 27
26
2 26 28 23 27
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
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
Shooting Star
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 3
4
1
Engulfing Patterns

Bullish
Engulfing
Pattern

Bearish
Engulfing
Pattern
28
 Engulfing Patterns
Bearish

Bullish
Bullish Engulfing Pattern

How many black candles did

this wrap around?
Bearish Engulfing Pattern
 The Trading Triad
?

Candle Charts

Capital
Western Preservation
32
Volume confirms signal

High
Volume
Hammer

33
 STOPS
Bearish
Engulfing
Shooting
Pattern
star
Shooting Star (convergence)
Shooting Star
?Web site: www. candlecharts.com

?E-mail: nison@candlecharts.com

?Telephone: 732.254.8660