Steve Nison’s Candlesticks Re‐Ignited: Advanced Candlesticks to Boost Confidence and Success For free continuing education and exclusive support for this video go to www.nisonu.com Founder and President: Candlecharts.com Candlestick Charting Techniques Western Western Charting Charting Tools Tools Steve Nison’s Trading Triad Success System Steve Nison’s Trading Triad Success System Trade Management Trade Management System System www.candlecharts.com 1 “If you want to see farther, you have to go higher” “If you want to see farther, you have to go higher” 2
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Steve Nison’s Candlesticks Re‐Ignited: Advanced Candlesticks to Boost Confidence and Success
For free continuing education and exclusive support for this video go to www.nisonu.com
Founder and President: Candlecharts.com
Candlestick Charting
Techniques
Western Western Charting Charting ToolsTools
Steve Nison’s
Trading TriadSuccessSystem
Steve Nison’s
Trading TriadSuccessSystem
Trade ManagementTrade Management
SystemSystem
www.candlecharts.com1
“If you want to see farther,you have to go higher”
“If you want to see farther,you have to go higher”
2
Steve Nison’s Candlesticks Re‐Ignited: Advanced Candlesticks to Boost Confidence and Success
For free continuing education and exclusive support for this video go to www.nisonu.com
1
• Quickly read the k ’
Candlestick Charts
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market’s message
• “Safety First” Trading
• Early reversals
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Reading the Market’s Message – Quickly and Accurately
Looks good
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Bear Sterns collapse
4
Looks good?
Reading the Market’s Message – Quickly and Accurately
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Steve Nison’s Candlesticks Re‐Ignited: Advanced Candlesticks to Boost Confidence and Success
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Looks good?
Reading the Market’s Message – Quickly and Accurately
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Reading the Psychology of the market
Think the $ had trouble in this area?Bear shadows, evening star, bearish engulfing patterns, shooting star…..
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Steve Nison’s Candlesticks Re‐Ignited: Advanced Candlesticks to Boost Confidence and Success
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Good buy?
Negative Selection
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What is one of the best ways to make money?
Those poor traders who got fooled into buying here.
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Owning the Knowledge
Let see what the candles tell us about supply/demandWhen prices get down near $62.00-61.50?
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Steve Nison’s Candlesticks Re‐Ignited: Advanced Candlesticks to Boost Confidence and Success
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Owning the Knowledge
Buying at hammer near $62.00Target near $63.70 (resistance)
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Get into a new trend before othertrend before other
traders see it
13
Reading the Market’s Message – Quickly and Accurately
Bear Stearns Collapse
14
Steve Nison’s Candlesticks Re‐Ignited: Advanced Candlesticks to Boost Confidence and Success
For free continuing education and exclusive support for this video go to www.nisonu.com
“Combinations of bullish and bearish candle lines indicate the direction of the market and investors psychological
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market and investors psychological conflicts at important turning points.”
15
It is easy to see who is in control here
It is easy to see who is in control here
How about now with these “spinning tops”?
How about now with these “spinning tops”?
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Candles reveal twice the information asa bar chart
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Steve Nison’s Candlesticks Re‐Ignited: Advanced Candlesticks to Boost Confidence and Success
For free continuing education and exclusive support for this video go to www.nisonu.com
Candles help us read the market’s message
What do the series of bullish shadows tell us about supply/demand near 63.50?
Is it any surprise what happened a few weeks later at that level?
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Quickly see “ The Mode of the Market”
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What candles do – and don’t do
What happen each time this gets near $43?
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Candles‐ or any technical system can’t forecast surprises
20
Steve Nison’s Candlesticks Re‐Ignited: Advanced Candlesticks to Boost Confidence and Success
For free continuing education and exclusive support for this video go to www.nisonu.com
BASIC CRITERIABASIC 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 PSYCHOLOGYPATTERN PSYCHOLOGY• For a sustainable rally, market has to be “pushed
up” - a doji shows the bullish momentum has now been curbed. The bulls now become concerned with this lack of sustained strength.
• Markets can sink of their own weight (i.e. don’t need sellers to pull markets lower- lack of buyers will do that) a doji hints buyers are now starting to absorb supply.
• The market is at a delicate turning period and could go either way.
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If early in uptrends/downtrends, or middle of a box range, doji is not important
Steve Nison’s Candlesticks Re‐Ignited: Advanced Candlesticks to Boost Confidence and Success
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Doji and momentum trading
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Doji confirming resistance
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Review of candle benefits
What candles don’t do
Ad an ed doji ta ti s and on epts Advanced doji tactics and concepts
Price confirmation
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Founder and President: Candlecharts.com 54
Steve Nison’s Candlesticks Re‐Ignited: Advanced Candlesticks to Boost Confidence and Success
For free continuing education and exclusive support for this video go to www.nisonu.com
Long Lower (Bullish) Shadows
Although this market is Although this market is descending, the long descending, the long lower shadows offsets lower shadows offsets some of the negative some of the negative outlookoutlook
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Steve Nison’s Candlesticks Re‐Ignited: Advanced Candlesticks to Boost Confidence and Success
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PATTERN PSYCHOLOGY PATTERN PSYCHOLOGY After this last burst of selling, new buying has started. This rejection of lower prices is indicating a change in balance between bulls and bears. The net result: lessening of bears’ confidence of sustainability of lower price levels (and a reason for bulls to start getting more optimistic).
SUPPORT/SUPPORT/MOMENTUM TRADINGMOMENTUM TRADING
• Low of hammer as support
• Consider shorting under low of pattern.
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White real body hammer is called a “Power Candle”
Can have small upper shadow (around 10% of lower shadow)
The more oversold and the longer the shadow, the higher degree of
PATTERN PSYCHOLOGY PATTERN PSYCHOLOGY Although it may seem that the market still has rising power left, it has shown that once the market has fallen, it has become very fragile.
SUPPORT/SUPPORT/MOMENTUM TRADINGMOMENTUM TRADING
• Not used as resistance
• Momentum: Trend is still up with this signal
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Same as the hammer except, market in an uptrend
Can have small upper shadow (around 10% of lower shadow)
Must have bear confirmation with a lower close, or for those more
PATTERN PSYCHOLOGY PATTERN PSYCHOLOGY While the market closes at, or near its low, it has shown an ability to rise. This may get the bears slightly nervous.
SUPPORT/SUPPORT/MOMENTUM TRADINGMOMENTUM TRADING
• Not used as support
• Momentum: Trend is still down with this signal
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Same as the shooting star, except market in a downtrend
Can have small lower shadow (around 10% of lower shadow)
Must have bull confirmation with a higher close, or for those more
Always needs candle confirmation with this signal and hanging man candle.
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One sided candles with Nison 360° Candle Analysis:
Review of basic criteria
Strict Criteria
Using as support or resistance
Detailed psychology behind each pattern
Momentum trading
Nison insights
Why hanging man and inverted hammer lines less important
Single candle lines the same in FX
Importance of trend
Can’t buy/sell on every candle signal
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CandlesticksRe-Ignited!
Advanced
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Candles:The Blended Candle Line
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Steve Nison’s Candlesticks Re‐Ignited: Advanced Candlesticks to Boost Confidence and Success
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“Japanese charts have meaning in a single candle, and when two candles
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are combined, the meaning becomes more significant.”
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Source: KABUSHIKISOUBA NO TECHNICAL BUNSEKI – G.Ikutaro
A blended candle is a way of “compressing” combinations of candle lines into as if they made one candle
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close 2close 2 =
How do we make a Blended Candle?
open 1open 1
close 2close 2
1) Use open of the first session for open of blended candle
2) Use close of the last session of pattern for close of blended candle.
3) Use highest high and lowest close of all sessions for upper and lower shadows of blended candle. 111
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think of Blended candle as a “Summary candle” of the pattern analyzed. How does this help?
1‐ To determine if a pattern is net bullish or bearish
2‐ To compare variations of candle patterns to determine the strength of the signal
Classic dark cloud cover
How is this non classic dark cloud cover different? What does it mean to the outlook?www.candlecharts.comwww.candlecharts.com 112
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Advanced
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Advanced Double Candle
Lines:Tweezers
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CRITERIACRITERIA• Two candles with matching highs (tweezers top) or lows (tweezers bottom)
• Uptrend for tweezers top and downtrend for tweezers bottom. But trend not critical.
• The first candle must be a long white (tweezers top) or long black (tweezers
Source: HAJIMETE KABUKA CHATO WO YOMU HITO NO HON by K. Hoshi
(tweezers top) or long black (tweezers bottom)
• 2nd candle must reflect diminishing of prior force
PATTERN PSYCHOLOGY PATTERN PSYCHOLOGY The first candle shows bulls (tweezers top) or bears (tweezers bottom) are dominating. With the second candle showing an inability to continue the move implied by the first candle, we are starting to see the power of the prior trend dissipating. 114
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The more the 2nd candle closes into the first candle, the better the signal.
This is a minor pattern unless there is a candle reversal signal that also emerges at the 2nd candle (i.e. piercing pattern, shooting star).
STRICT CRITERIA STRICT CRITERIA • Both candles are large (very rare)
PATTERN PSYCHOLOGY PATTERN PSYCHOLOGY With the gap down, bears are relieved. The “bulls are backed into a corner and came out fighting in a heroic fight. Kamikaze fights are always frightening, so the bears seeing this take to the sidelines and the bulls may get reinforcements.”
SUPPORT/SUPPORT/MOMENTUM TRADINGMOMENTUM TRADING
• Not used as support or resistance.
• Consider selling on move under low of pattern.
122
No pattern like this for FX since the market gaps lower.
While the ideal pattern is both large real bodies, we would still view this as important even if only the white
PATTERN PSYCHOLOGY PATTERN PSYCHOLOGY Bears in control is echoed by long dark candle. Sharp gap lower means bears have a strong foothold. But, with sharp bounce back by end of the session, the market has “displayed uneasiness at a low price.” The bears now sense danger.
SUPPORT/SUPPORT/MOMENTUM TRADINGMOMENTUM TRADING
• Lowest low of both candles as support
• Consider selling on move under support level 125
For FX, intraday and indexes can have the same (or within 2 pips for FX) open as prior close
Long black and then long white shows extreme shift in psychology
around small candle) are opposite those in Harami Pattern (small candle in a large candle)
If Bullish Engulfing pattern appears during rally, Japanese call it a “last engulfing pattern”, and may be buying climax. Confirmation close under close of white candle. This is not an important pattern, just think about not buying.
FX Pattern
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Steve Nison’s Candlesticks Re‐Ignited: Advanced Candlesticks to Boost Confidence and Success
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This is interesting: I recently purchased a technical analysis package from a “WELL KNOWN” technical analysis guru. During his charting presentation he made several references to candlestick patterns, and each references that he made was absolutely wrong! …During a strong uptrend, he called a large white real body after a
small black real body a bullish engulfing pattern. If I remember right – a bullish engulfing pattern doesn’t count during an uptrend. If I hadn’t bought and studied your package, I never would have known that and would have assumed that he was right.
PATTERN PSYCHOLOGY PATTERN PSYCHOLOGY The long black candle echoes the heaviness of supply. But, the next session’s gap up, and lack of downside, follow through results in the bears seeing that their drive is becoming impeded.
SUPPORT/SUPPORT/MOMENTUM TRADINGMOMENTUM TRADING
• Not used as support (unless 2nd
candle is reversal signal (i.e. hammer)
• Not used for momentum trading
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Steve Nison’s Candlesticks Re‐Ignited: Advanced Candlesticks to Boost Confidence and Success
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For FX, intraday and indexes can have the same (or within 2 pips for FX) open as prior close
If the 2nd candle is a doji, the pattern is called a harami cross
The more the 2nd candle gets deeply into the black candle, the better the
Because FX, etc, white candle can’t get deeply into black real body, it is best to wait for bull confirmation by a higher open or close than the white real body.
In general, the less the 2nd candle gets into the black candle, the more confirmation is needed.
Opposite of bearish harami
FX Pattern
139
Bull harami
Think the market is different on this sessioncompared to prior session?
PATTERN PSYCHOLOGY PATTERN PSYCHOLOGY The surprise gap, higher opening on the second day after a strong selling session, may initially be of minor concern. But, with the white candle’s strong close, the bears sense danger and also gives the bulls cause for optimism.
SUPPORT/SUPPORT/MOMENTUM TRADINGMOMENTUM TRADING
• Lowest low of both candles as support
• Consider selling on move under low of pattern 143
Since the market has to gap higher, this pattern not applicable to FX.
The higher the market gaps on the open, and the higher the close on the white candle, the more meaningful the pattern
PATTERN PSYCHOLOGY PATTERN PSYCHOLOGY While 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/SUPPORT/MOMENTUM TRADINGMOMENTUM TRADING
• Lowest low of both candles as support
• Consider selling on move under low of pattern 147
Steve Nison’s Candlesticks Re‐Ignited: Advanced Candlesticks to Boost Confidence and Success
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Easy way to remember this pattern is the opens are the about the same (or the 2nd candle open gaps away from 1st
candles open.)
Since the market has to gap higher, this pattern not applicable to FX
Advanced double candle bull signals using candle progression using in‐depth candle analysis for:
Bull counter ‐ attack
Piercing Pattern
B ll h Bull sash
Bullish Engulfing Pattern
Bull Separating lines
Bull Harami and confirmation
How some patterns have poor risk/reward and other Nison insights
153
Steve Nison’s Candlesticks Re‐Ignited: Advanced Candlesticks to Boost Confidence and Success
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CandlesticksRe-Ignited!
Advanced
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Advanced Double Candle
Lines:The Bear Signals
Founder and President: Candlecharts.com 154
CANDLE PROGRESSIONDESCENDING BLACK REAL BODY
BearishCounterAttackPattern
Dark CloudCover
BearishEngulfing
Pattern
BearSash
Pattern
Bear Separating
Line
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BASIC CRITERIABASIC CRITERIA• Two session pattern
• Uptrend but, even with no apparent trend would be a cautionary signal
• White real body followed by a black real body that gaps up on the open and then closes at or near white candles' close
STRICT CRITERIA STRICT CRITERIA • Both candles are large (very rare)
• Large black real body
PATTERN PSYCHOLOGY PATTERN PSYCHOLOGY With the tall white, and especially with the gap higher next session, the bulls are happy. But then a strong bear counter force comes in to drag the market back to the prior close. The tone of the market now shifts from bullish optimism to uncertainty.
SUPPORT/SUPPORT/MOMENTUM TRADINGMOMENTUM TRADING
• Not used as support or resistance.
• Consider buying on breakout over high of pattern.
156
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No pattern like this for FX since the market gaps higher
While the ideal pattern is both large real bodies, we would still view this as important even if only the black
Steve Nison’s Candlesticks Re‐Ignited: Advanced Candlesticks to Boost Confidence and Success
For free continuing education and exclusive support for this video go to www.nisonu.com
BASIC CRITERIABASIC CRITERIA• Two session pattern
• Market in uptrend
• Open of black candle higher than prior close
• Black candle closes into white candle
STRICT CRITERIA STRICT CRITERIA Bl k dl l th 50% i t hit• Black candle closes more than 50% into white real body
• Black candle opens above prior high
• Tall white and black candles
PATTERN PSYCHOLOGY PATTERN PSYCHOLOGY White candle and then gap higher keeps bulls happy. But, with black candle finishing well below white candle’s close, the “upward energy has cooled to the extreme” causing the bulls to become concerned and bears bolder.
SUPPORT/SUPPORT/MOMENTUM TRADINGMOMENTUM TRADING
• Highest high of both candles as resistance
• Consider buying on breakout over high of pattern 160
For FX, intraday and indexes can have the same (or within 2 pips for FX) open as prior close
If the black candle doesn’t get more than ½ way into white, it is called an “incomplete dark cloud cover” and it is
) ppHarami Pattern (small candle in a large candle)
If Bearish Engulfing pattern appears during selloff, Japanese call it a “last engulfing pattern and may be selling climax. Confirmation is a close above black candle close. This is not an important pattern- just think about not selling.
FX Pattern
169
Misinformation can cost you Big $$$
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170
Candles as Support
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S1
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PATTERN PSYCHOLOGY PATTERN PSYCHOLOGY The indications based on the tall white candle’s vitality is for the rally to continue. But, next session’s gap down and then failure to resume the advance to beyond the prior session, shows those who had forecast strength are wrong! The rally could now be running out of fuel.
SUPPORT/SUPPORT/MOMENTUM TRADINGMOMENTUM TRADING
• Not used as resistance (unless 2nd
candle is reversal signal (i.e. shooting star)
• Not used for momentum trading
176
For FX, intraday and indexes can have the same (or within 2 pips for FX) open as prior close
If the 2nd candle is a doji, the pattern is called a harami cross
The more the 2nd candle gets deeply into the white candle, the better the
Because FX, etc, black can’t get deeply into white candle, it is best to wait for bear confirmation by a lower open or close than black candle’s real body.
In general, the less the 2nd candle gets more into the white candle, the more confirmation is needed.
Opposite of bullish harami
FX Pattern
177
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Bear Harami
Not Bear Harami
Because these are near the highs of the prior candle would want bear candle confirmation
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Confirmation important in FX
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BASIC CRITERIABASIC CRITERIA• Trend not important
• White candle followed by black candle that opens within white real body and closes under prior open.
STRICT CRITERIA STRICT CRITERIA • Both long real bodiesBoth long real bodies
• 2nd candle closes under prior low
• Black real body closes at, or near, its lows
PATTERN PSYCHOLOGY PATTERN PSYCHOLOGY The white candle means the bulls are running the show. The next session, the market gaps lower and is not only unable to make up this lost ground, but closes under the white candle. This shows the bullish energy has been sapped out of the market resulting in very scared bulls.
SUPPORT/SUPPORT/MOMENTUM TRADINGMOMENTUM TRADING
• Highest high of both candles as resistance
• Consider buying on breakout over high of pattern 180
Steve Nison’s Candlesticks Re‐Ignited: Advanced Candlesticks to Boost Confidence and Success
For free continuing education and exclusive support for this video go to www.nisonu.com
Since the market has to gap lower this pattern not applicable to FX.
The more the market gaps down on the open, and the lower the close on the black candle, the more meaningful the pattern
PATTERN PSYCHOLOGY PATTERN PSYCHOLOGY With the gap down on 2nd day, the bulls sense danger. To make matters worse for them, the market can’t even make up for the ground lost on the opening. The tide of the market momentum has now turned down.
SUPPORT/SUPPORT/MOMENTUM TRADINGMOMENTUM TRADING
• Highest high of both candles as resistance
• Consider buying on move above high of pattern 185
Easy way to remember this pattern is the opens are the about the same (or the 2nd candle open gaps away from 1st
candle’s open.)
Since the market has to gap lower this pattern not applicable to FX.