The document discusses various candlestick patterns and their implications, including: - The checkmate principle, where a series of tall white candles followed by black candles near the same resistance level indicates the bulls' momentum is being slowed. - Tweezers tops/bottoms, which suggest the prior trend may not be sustainable when the first candle is large and the second session has the same high/low with a smaller real body. - Morning star/evening star patterns, which indicate bulls/bears are taking control when the third candle closes deeply in the first candle's real body. - Rising/falling windows, where resistance/support is strengthened when gaps are accompanied by these patterns.

1. 61
Hammer as supportHammer as support
61

2. 62
The Checkmate PrincipleThe Checkmate Principle
WhatWhat
happenedhappened
after eachafter each
whitewhite
candle?candle?
When there is a series of tall white candles
followed by black candles or small real bodies
near the same resistance level it reveals that the
bulls’ drive is being “checkmated”
62

3. Tweezers Tops and Bottom
Criteria:
• First Candle is large real body
• Second session same high and,
ideally, small real body
Implication: Prior trend doesn’t
have a solid foundation63

4. Tweezers Bottom
64

5. Tweezers tops
65

6. Tweezers top
66

7. Morning StarMorning Star
white or black
Criteria:
• Market in down trend
•First candle long black
• Second real body (spinning top,
black or white) doesn’t overlap first
session’s real body
• Third candle (white) closes deeply in
first black real body
Implication: Bulls are taking control
67

8. 68
Morning StarMorning Star
white or black

9. Morning Star variation
69

10. 70
Evening StarEvening Star
white or black
1
2
3
Criteria:
• Market in an up trend
•First candle is long white
• Second real body (black or white
spinning top) doesn’t overlap first
session’s real body
• Third candle (black) closes deeply in
first white real body
Implication: Bears are taking control

11. Nison TradingNison Trading
PrinciplePrinciple
Candle signals must beCandle signals must be
evaluated and actedevaluated and acted
upon within the market’supon within the market’s
contextcontext
71

12. Evening Star compared to Morning Star
Evening Star
Morning Star
Would you
buy here?
How about
here?
72

13. Evening Star and Risk/ Reward
24 1
July
8 15 22 29 5
August
12 19 26 3 9
September
16 2
14.0
14.5
15.0
15.5
16.0
16.5
17.0
17.5
18.0
18.5
19.0
19.5
20.0
HEIDRICK STRUGG
Evening Star
completed here. This
is likely a poor
risk/reward for a short
sale.
This doji
confirms
the
resistance
area set by
the evening
star and as
such may
offer a
better r/r.
73

14. 74
Windows
Rising
Window
Falling
Window

15. 75
Trading TacticsTrading Tactics –– practicepractice
1. What pattern is highlighted?
2. When would you sell short based on this pattern?
75

16. 76
Trading TacticsTrading Tactics –– practicepractice (answer)(answer)
1. What pattern is highlighted? Bearish engulfing pattern
2. When would you sell short based on this pattern?
Because of the rising window we would not sell on the
completion of this pattern. As such we could sell on (a) the
resistance at the highs of the bearish engulfing
pattern, or (b) on a break under the windows support.
Rising
window’s
support
Potential
selling
levels
76

17. 77
Breakaway Gaps

18. 78
Breakaway Gap
1
April
8 15 22 29
May
6 13 20 27
30.0
30.5
31.0
31.5
32.0
32.5
33.0
33.5
34.0
34.5
35.0
35.5
36.0
36.5
37.0
37.5
38.0
38.5
39.0
PRECISION DRILL

19. 79
Breakaway Gap

20. 80
Breakaway gap
22 28 4
February
11 19 25 4
March
11 18 25 1
April
8 15 2
53.5
54.0
54.5
55.0
55.5
56.0
56.5
57.0
57.5
58.0
58.5
59.0
59.5
60.0
60.5
61.0
61.5
62.0
62.5
63.0
63.5
64.0
64.5
65.0
65.5
66.0
66.5
67.0
67.5
68.0
68.5
69.0
69.5
70.0
70.5
INTL GAME TECH
The stock not only breaks
support – but does so with a
falling window. This increases
the potency of the window’s
resistance. Note the shooting star
and bearish engulfing pattern on
the rebound