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Sakata Method

The long jump: the opening price is the start up, the price session the run up, the closing
price the take off. Length of the jump depends on timing of run up and condition of take
off.

Yoritsuki takane-opeing high


Yasunebike-closing low
Jittai-candle body
Kage-wick/shadow
Uwakage-upper shadow
Shitakage-lower shadow
Doji-opening, closing same.

In the body, more concentrated trade, heavier volume than in wick, therefore more
important signal is between opening and closing.

Marubozu (Shaven Head) Strong line

Karakasa (paper umbrella, Hammer)


In low price area: strong buy.
In a rising market with prices struggling up: strong buy.
Near the ceiling (hanging line) ‘hangman’: going down:sell.
Yose line-(long leg doji), near turning point. Wait for next line to confirm turn.

Koma (spinning top): Unclear

Tonbo (dragonfly/ taketonbo ; bamboo toy dragonfly) : May fly up or down.

Tohba( Hero’s tombstone) : End of the war.


Kabuse Line (a dark cloud cover), Market turn: Sell. Usually occur near the ceiling
and on weekends. Red line on Friday, black line on Monday. Reaction to news over the
weekend.

1) If 2nd line close below center of 1st line, then is confirm turning point.
2) Longer upper shadow for 2nd line; less selling power.
3) Bottom shadow for 2nd line is buying resistance.

Atekubi, Irikubi and Sashikomi lines :Sell


Irikubi line
Atekubi Sashikom i

1) Red line volume large.


2) High price.
3) Market on decline.
4) Buyers got no strength to push beyond previous low.
5) Previous low is sellers resistance point to sell.
6) Sashikomi, 2nd line close below middle of 1st line.
Kirikomi/ Kirikaeshi line: Buy
Kirikom i

1) Opposite of Kabuse line.


2) 2nd line close above 1st line middle.
3) Usually over the weekend.
4) Rarely occur at the bottom.

Tasuki line :
Sell
Buy

1) Profit taking; next line will continue in direction of 1st line.


2) Do not have to be long lines.
3) Rarely occur at the bottom.

Tsutsumi line (line that engulfs previous line): market turn.

Sell Buy

1) 1st line is covering of positions


2) If previous day and down gap has heavy volume, is more confirm.
3) If 2nd line finishes up below/above 1st line to get a sashikomi/ kirikomi line, if 3rd
line finish above 1st line, 3rd and 2nd combined will still give a tsutsumi.
Harami line: Market turn

1 1 2 2 3 3

1) 2nd lines color does not matter, its 1st line color that is indicative.
2) Heavy volume in 2nd line
3) Strength is divided between price pushers and profit takers.
4) Must see that previous few lines before 1st line is same trend as 1st line.

Hoshi (Star) : Market turn at ceiling—SELL


Star

1 1 2 2 3 3 4 4

1) Same as Harami.
2) Indicate ceiling.
3) There is gap between main body 1st line and 2nd line low.
4) If 3rd line is long black line, it is a 3-river evening star.

Deai line (meeting lines):

1 1 2 3

1) 1 is same as atekubi.
2) 2 is probably a Kabuse line.
Ikichigai line (moving away lines):

1 1 2 2

1) For 1, in a rising market, buy on dip.


2) For 1, in a falling market, sell on rally.
3) For 2, in a rising market, is dip to buy.
4) For 2, in a falling, is signal to sell.

Side by side reds (narabiaka) and blacks (narabikuro)

1 1 2 2

1) Never long lines side by side.


2) By itself indicates nothing, but if gap up after rising market, or fluctuates at low
prices, then big move ahead, good signal to buy.
3) If occur after a falling market, then ready to sell more.
4) If there is not after gap up, then it is called side by side stalemate- resistance.

Tweezer tops/ Tweezer bottoms =(double top/ double bottom)

Sakata’s 5 methods
1) Sanzan (3 mountains)
2) Sansen (3 rivers)
3) Sanku (3 gaps)
4) Sanpei (3 parallel lines)
5) Sanpo (3 methods)
1) Sanzan
Heads and shoulders, double top/bottom, round top/bottom.
Sakata’s favourite is a round bottom with a gap up—strong buy.

2) Sansen
It is a hoshi followed by a long black line. It is a strong signal of market turn. It can
be for the other way too.

3) Sanku.
In a rising market, 3 gaps between 4 red lines are indicative of completion of short
covering, thus reaching a top, and is a SELL.
Once it falls below top gap, it is a SELL.
It will fall to below the middle gap.
Vice-versa for falling market.

4) Sanpei
Lines start above/below(rising/falling) center point of previous line.
Above/below (rising/falling) previous 5-6 lines, direction will continue.
If lines get weaker, then it is time to take profit.

5) Sanpo
The three methods: Buy, Sell, Rest.
When unsure or when market is reactionary, stay out.