Candle presentation 3


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Candle presentation 3

  1. 1. Do your trading charts give you a headache?<br />
  2. 2. This is Mike. He’s lost thousands of dollars using<br />the wrong charts. <br />Sound familiar?<br />
  3. 3. Meet John. He’s <br />made thousands of dollars in the market. <br />What does John do differently?<br />
  4. 4. John uses Candlestickcharts to track stock prices.<br />
  5. 5. Candlestick charts were created in the 1700’s for tracking rice prices.<br />
  6. 6. Manuhisa Homma made a huge fortune with over 100 consecutive winning trades by using candlesticks!<br />
  7. 7. Candlestick charts are easier to read than bar charts.<br />
  8. 8. They also make it easier to tell whether the open or close price was higher.<br />
  9. 9. Candlesticks have 3 major parts<br />Upper wick/shadow (buying pressure)<br /> Real body<br />Lower wick/shadow (selling pressure)<br />
  10. 10. Bullish candlesticks have hollow bodies, showing that the closing price is higher than the opening price.<br />High<br />Close<br />Open<br />Low<br />
  11. 11. Bearish candlesticks have solid bodies, showing that the closing price is lower than the opening price.<br />High<br />Open<br />Close<br />Low<br />
  12. 12. There are many different types of candlesticks.<br />
  13. 13. Doji<br />The open and close are very close together, creating a very small body.<br />Represent indecision between Bulls and Bears<br />
  14. 14. DragonflyDoji<br />Open and close are the same with long selling pressure.<br />
  15. 15. GravestoneDoji<br />Open and close are the same with long buying pressure.<br />
  16. 16. Spinning Top Doji<br />Small real bodies with equal buying and selling pressure.<br />
  17. 17. Hammer (Hanging Man)<br />Shadow should be at least twice the height of the body.Signals a reversal after a downtrend.Control has shifted from sellers to buyers.<br />
  18. 18. Inverted Hammer (Shooting Star)<br />Converse of the Hammer (Hanging Man).Signals a reversal after an up trend.Control has shifted from buyers to sellers.<br />
  19. 19. tells us what the market did, but doesn’t help us predict the future.<br />A single candlestick<br />
  20. 20. Candlestick patterns can give us information about how prices are going to move.<br />
  21. 21. Some patterns tell us there will be a reversal.<br />
  22. 22. Dark Cloud CoverReversal signal after an up-trend<br />Implies lower prices<br />Strong white body on 1st Candle<br />Strong filled body on the 2nd candle<br />The close of the 2nd candle must be more than half-way downthe body of the first candle.<br />
  23. 23. Piercing Line Reversal<br />Signal after a down-trend.<br />Strong filled body on 1st candle.<br />The 2nd candle must have a strong white body. <br />The close of the 2ndcandle must be more than half-way up the body of the first candle.<br />
  24. 24. Engulfing PatternsOne bullish and one bearish candle.<br />The 2nd candle must fully cover the 1st candle.<br />Bullish or Bearish, according to the second candle.<br />
  25. 25. Morning StarBullish indicator after a downtrend<br />Close of the 3rd candle should be in the top half of the 1st candle.<br />
  26. 26. Evening StarOpposite of a Morning Star Pattern<br />Reversal of an uptrend<br />The close of the 3rd candle should be in the lower half of the 1st candle.<br />
  27. 27. Doji Star<br />Bearish reversal of an uptrend<br />Weaker than the Evening Star<br />Requires confirmation with next candle closing in the bottom half of the 1st candle.<br />
  28. 28. Shooting Star Pattern<br />Bearish reversal of an uptrend.<br />Similar to Doji Star Pattern.<br />2nd candle is a Shooting Star. <br />Requires confirmation with next candle closing in the bottom half of the 1st candle.<br />
  29. 29. Upside Gap and 2 Crows<br />Signals reversal of an uptrend.<br />Gap between 1st (white) candlestick and 2nd (filled) candlestick.<br />3rd candlestick is also filled and engulfs the 2nd candlestick without filling the gap.<br />
  30. 30. Harami<br />Large candlestick followed by a small candlestick of the opposite color/direction<br />Signals reversal of current trend<br />
  31. 31. Other candlestick patterns tell us the current trend will continue.<br />
  32. 32. Gaps and Windowsare a type of candlestick pattern where there is a gap between two adjacent candlesticks.<br />
  33. 33. Upside Gap<br />Occurs in an uptrend.<br />Gap between the two white candlesticks is not filled by the shaded candlestick.<br />Uptrend will continue.<br />
  34. 34. Downside Gap<br />Occurs in a downtrend.<br />Gap between the two filled candlesticks is not filled by the white candlestick.<br />Downtrend will continue.<br />
  35. 35. Rising Three Methods<br />Indicated continuation of uptrend.<br />Powerful white candle followed by 3-4 small descending filled candles.<br />Low volume.<br />Final part is another strong white candle with a new high price.<br />
  36. 36. Indicates continuation of a downtrend.<br />Opposite of Rising Three Methods.<br />Powerful filled candle followed by 3-4 small ascending white candles.<br />Low volume.<br />Final part is another strong filled candle with a new low price.<br />Falling Three Methods<br />
  37. 37. As always, don’t forget <br />the 3 C’s<br />ContentWhat does the candlestick or pattern tell you?ClarityIs the candlestick pattern clear?ConfirmationDo other indicators confirm what the candlestick chart is telling you?<br />
  38. 38. Resources<br />Websites<br /><br /><br /><br /><br /><br />Books<br />Technical Analysis – PRING<br />Candlesticks - Steve Nision<br />