Professional Documents
Culture Documents
Charting Techniques:
Secrets to Becoming a
Samurai Trader
He who is well
prepared has won
half the battle
Slide 3
3
3
4
4
Candle or noses
5
5
Nison Trading
Principle
Candlesticks do not give
price targets.
Gravestone Doji
This doji takes on extra significance
because it confirms a resistance level
Nison Trading
Principle
A candlestick line or pattern
requires two criteria:
The shape of the line or pattern
The preceding trend
10
11
Box Range
12
Doji
A doji in a
downtrend
is a
Southern
Doji
13
Southern Doji
14
Nison Trading
Principle
Candle signals must be
evaluated and acted upon
within the markets context
15
Doji in Context
Concept:
If a doji makes a new
high close for the move,
wait for bearish
confirmation with a close
under the dojis close
16
Need a
close
under
here to
turn
bearish
Doji in Context
Which of these
scenarios is a more
likely top reversal?
Scenario 1
17
Scenario 2
18
19
20
Doji
TJX
42.5
42.0
41.5
41.0
40.5
40.0
39.5
39.0
38.5
38.0
37.5
37.0
28
21
4
February
11
19
25
4
March
11
18
25
1
April
15
Trading Tactics
1) Name the two
reversal signals
at the arrows.
2) Would you use
these signals to
sell short?
Liquidate longs?
Why?
3) What is bearish
confirmation of
the reversal
signals?
22
Doji as Resistance
23
Doji
24
25
26
Doji as Resistance
27
A -1
28
B-2
C-3
A-1
Rally may
just be
starting
29
B-2
Market not
overextended
C-35
Resistance
confirmed by
doji
20.5
20.0
19.5
19.0
18.5
18.0
17.5
17.0
16.5
16.0
15.5
15.0
14.5
14.0
13.5
1
15
30
22
29
5
August
12
19
26
3
9
September
16
23
Shadows
32
Scenario
1
Scenario
2
33
Hammer
Criteria:
Small real body at, or near top, of range
Lower shadow at least 2x real body
Market in down trend
Implication: Groping for a bottom
black or white
34
Shooting Star
Criteria:
Small real body at, or near bottom, of range
Upper shadow at least 2x real body
Market in an up trend
Implication: Signaling Trouble Overhead
35
black or white
Whos in Charge?
37
38
39
High-wave candle
RDY
The market is
at a new highbut the high
wave candle
shows the
bulls are not in
full control.
40
Engulfing Patterns
Bearish
Engulfing
Pattern
Criteria:
White real body wraps around
preceding black real body
Market in down trend
Implication: Market bottoming out
Criteria:
Black real body wraps around
preceding white real body
Market in up trend
41
Bullish
Engulfing
Pattern
10.3
10.2
10.1
10.0
9.9
9.8
9.7
9.6
9.5
9.4
9.3
9.2
9.1
9.0
8.9
8.8
8.7
8.6
8.5
8.4
8.3
8.2
8.1
8.0
7.9
7.8
7.7
7.6
7.5
7.4
16
23
30
7
October
42
14
21
Note how
many black
candles the
white
candle
wrapped
around
43
Shooting
star
44
Center tall
white
45
46
Relative Strength
47
48
49
15
22
8.7
8.6
8.5
8.4
8.3
8.2
8.1
8.0
7.9
29
6
May
Bullish
Engulfing
Pattern
Last
Engulfing
Pattern
50
51
52
53
54
Nison Trading
Principle
Not all candle signals should
be used to buy or sell. Always
consider the risk/reward
aspect of the trade.
55
Pattern
Completed
Here
56
close 2
open 1
57
58
Bearish Checkmate
9
= strong session
9 = failure to sustain rally
This shows lack of bullish follow
through shows that each time this gets
in the 60-64 range.
60
Hammer as support
61
What
happened
after each
white
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
Criteria:
First Candle is large real body
Second session same high and,
ideally, small real body
63
Tweezers Bottom
64
Tweezers tops
65
Tweezers top
66
Morning Star
Criteria:
Market in down trend
First candle long black
Second real body (spinning top,
black or white) doesnt overlap first
sessions real body
Third candle (white) closes deeply in
first black real body
Implication: Bulls are taking control
white or black
67
Morning Star
white or black
68
69
Evening Star
white or black
Criteria:
Market in an up trend
First candle is long white
Second real body (black or white
spinning top) doesnt overlap first
sessions real body
Third candle (black) closes deeply in
first white real body
Implication: Bears are taking control
70
3
1
Nison Trading
Principle
Candle signals must be
evaluated and acted
upon within the markets
context
71
Evening Star
Would you
buy here?
How about
here?
Morning Star
72
Evening Star
completed here. This
is likely a poor
risk/reward for a short
sale.
19.0
18.5
This doji
confirms
the
resistance
area set by
the evening
star and as
such may
offer a
better r/r.
18.0
17.5
17.0
16.5
16.0
15.5
15.0
14.5
14.0
24
73
1
July
15
22
29
5
August
12
19
26
3
9
September
16
Windows
Rising
Window
74
Falling
Window
75
(answer)
Potential
selling
levels
Rising
windows
support
76
Breakaway Gaps
77
Breakaway Gap
PRECISION DRILL
39.0
38.5
38.0
37.5
37.0
36.5
36.0
35.5
35.0
34.5
34.0
33.5
33.0
32.5
32.0
31.5
31.0
30.5
30.0
1
April
78
15
22
29
6
May
13
20
27
Breakaway Gap
79
Breakaway gap
INTL GAME TECH
22
80
28
11
19
25
4
March
11
70.5
70.0
69.5
69.0
68.5
68.0
67.5
67.0
66.5
66.0
65.5
65.0
64.5
64.0
63.5
63.0
62.5
62.0
61.5
61.0
60.5
60.0
59.5
59.0
58.5
58.0
57.5
57.0
56.5
56.0
55.5
55.0
54.5
54.0
53.5
18
25
1
April
15
Breakaway Gap
MICROSOFT
70.0
69.5
69.0
68.5
Gapped under
support
68.0
67.5
67.0
66.5
Small
windows
66.0
65.5
65.0
64.5
64.0
63.5
63.0
62.5
62.0
61.5
61.0
60.5
60.0
59.5
59.0
58.5
58.0
57.5
31
7
2002
81
14
22
28
4
February
11
19
25
4
March
11
18
25
57.0
Breakaway Gap
82
Nison Trading
Principle
83
Large
window with
the bottom
of this
window as
pivotal
support
84
Small
window
Large Window
85
31.5
31.0
30.5
30.0
29.5
29.0
28.5
28.0
27.5
27.0
26.5
26.0
25.5
25.0
24.5
24.0
23.5
16
86
17
18
19
22
23
24
25
26
29
30
31
1
2
August
Small Window
87
88
Three Windows
89
Island Bottom
90
Island Bottom
91
Island Top
92
Windows as Target
Daily
prices
for
1993
Once
under
$21 we
have to
go to
1993
for next
support
93
Rising
Window
Window as a target
target
Buy here
94
Rounding Tops/Bottoms
Dumpling Top
Dumpling Top
96
97
98
Midway Gap
99
100
Congestion
band
High price
gapping
play
15
22
29
6
July
101
13
20
Gapping Doji
102
Gapping Doji
103
Interactive Chart
1. What candle signals are at A and B?
2. What candle signals are at C and D?
3. Why did the rally stall at E and what was
the candle signal formed?
4. After the decline from E why did the
market find support near $18?
B
C
104
Small rising
window
B
C
105
Record Sessions
Overbought / Oversold Indicator
107
Start here
108
109
Three advancing
soldiers
110
Advancing
three soldiers
111
112
50
49
48
47
46
45
44
43
42
41
40
39
38
37
36
35
34
33
32
31
30
29
28
27
26
25
113
25
2
July
16
23
30
6
August
13
20
27
4
10
September
24
114
Rising Three
Falling Three
47.0
46.5
46.0
45.5
45.0
44.5
44.0
43.5
43.0
42.5
42.0
41.5
41.0
40.5
40.0
39.5
39.0
19
115
20
21
22
25
26
27
28
1
4
March
11
12
13
14
15
18
19
20
21
22
25
26
27
28
1
Ap
close
117
118
119
120
121
close
close
Bearish
122
Bullish
124
125
Bullish Counter-attack
126
doji
127
Bearish engulfing
pattern
Bearish Counter-attack
Counterattack also
confirming
resistance
128
Phantom method
130
Phantom
131
132
(slide 1 of 2)
Phantom method
133
(slide 2 of 2)
134
Box range
Do the bears or
bulls have the
greater
control?
135
Box Range
Do the bears or
bulls have the
greater
control?
136
Intraday Techniques
Flexibility reading candle signals
Combining intraday signals with longer
time frame support or resistance.
Harnessing intraday charts for signals
not available on daily charts
137
138
Bullish engulfing
pattern
Open and
closings are
about the
same, still
view this as a
morning star
139
Windows on intraday
Most intraday
windows will be
between the last
candle yesterday
and the first
candle today
140
Intraday Techniques
141
(slide 1 of 2)
June
14
We see a solid band of support near 43 at the circles dual
bullish engulfing patterns on the week of June 3. There was a
test of this support on June 14. We are thinking of buying on the
session at the arrow as the stock gets near this support on June
26. We then turn to an intra-day chart to see if there are any buy
signals as the stock as it approaches 43 .. (see next chart).
142
Buying
area
Hammer
143
45.5
45.0
44.5
44.0
43.5
43.0
42.5
42.0
41.5
41.0
40.5
40.0
39.5
39.0
38.5
38.0
37.5
37.0
36.5
36.0
35.5
Volume
8000
7000
6000
5000
4000
x1000
15
22
29
6
May
144
13
20
28
3
June
10
17
(slide 2 of 2)
Falling
window
The
spinning
tops helped
confirm the
importance
of the
falling
windows
resistance
near $40
145
146
147
Former resistance
148
Change of
polarity now
forecasts
support near
70. We then
turn to
intraday..
149
Bearish shadows
confirming
resistance
Intraday Techniques
150
(slide 1 of 2)
151
152
27th
153
28th
no window on this
daily chart on June 7but check intra-day
chart
154
(slide 1 of 2)
Top of falling
window
June 7
155
(slide 2 of 2)
slide 1 of 2
Prior high
156
slide 2 of 2
157
(slide 1 of 3)
158
slide 2 of 3
On this 30
minute chart on
Oct.1 is there a
support area?
Oct. 1
159
160
slide 3 of 3
slide 1 of 3
Dec. 3
161
slide 2 of 3
Dec. 3
See any
resistance here
before 955 on
this 30 minute
chart?
162
162
slide 3 of 3
Dec. 3
163
164
(Slide 1 of 3)
(Slide 2 of 3)
March 20
165
166
(Slide 3 of 3)
Candle Charts
Western
Candlecharts.com
Helping Clients Spot Market Turns Before the Competition
167
Candlecharts.com
Trading Tactics
Timing
Market Chameleon
Trend
The Three Cs
168
Candlecharts.com
Market Timing
169
27.5
27.0
26.5
26.0
25.5
25.0
24.5
24.0
23.5
170
24
1
October
15
22
29
5
November
23.0
22.5
22.0
21.5
21.0
20.5
20.0
19.5
19.0
Morning star
Rising window
171
172
173
43.5
Dark cloud
cover as
exit signal
43.0
42.5
42.0
41.5
41.0
40.5
40.0
39.5
39.0
38.5
38.0
37.5
37.0
6
174
11
12
13
14
15
19
20
21
22
25
26
27
28
1
4
March
11
12
13
14
Small
bearish
engulfing
pattern as
exit
26.0
25.5
25.0
24.5
24.0
23.5
23.0
or close
under
bull
channel
22.5
22.0
21.5
21.0
20.5
Hammer
and Bullish
Shadows
to enter
4
February
175
11
19
25
4
March
20.0
19.5
19.0
11
Candlecharts.com
Nison Trading
Principle
Being a Market Chameleon:
As the market environment changes
based on what the technical signals are
telling us we should adapt our market
outlook
177
Market Chemeleon
orginal
Falling
target
window
Shooting star
(new target)
Buy
178
179
Dark Cloud
Cover!
180
181
182
Nison Trading
Principle
The IfThen Rule:
If the market does not act as forecasted then
exit the position
Initiate a position when the market justifies
your potential trade (i.e. if near resistance, If the
market breaks above resistance, Then one can
buy.
183
If.Then Rule
(slide 1 of 2)
184
If.Then Rule
(slide 2 of 2)
185
If.Then Rule
The bullish
ascending triangle
and the new high
close for the move
strongly hints that
the market will
break out. But
resistance held.
186
Candlecharts.com
Take advantage of
field conditions
Prevailing Trend
187
Nison Trading
Principle
Initiate new trades in the direction of
the major trend (unless you are looking
for a small move):
On bullish signals in a bull market buy long. On bullish
signals in a bear trend, cover shorts.
On bearish signals in a bear trend, sell short. On bearish
signals in a bull market, liquidate longs.
188
Rising
window as
support (also
a breakaway
gap)
189
Rising
Window
190
Importance of Trend
Change of
Polarity
Resistance zone
Concept: place trade in
direction of prevailing trend.
Since this is down we should
look for bounce from bullish
engulfing pattern and then sell
short at change of polarity.
191
Rising
windows
192
Candlecharts.com
193
Candlecharts.com
Candles in Context
194
Nison Trading
Principle
Candle signals must be
evaluated and acted upon
within the markets context
for example what happened
before the signal?
195
Candles in Context
Would you
buy on this
hammer?
196
window
197
44.0
43.5
43.0
42.5
42.0
41.5
41.0
40.5
40.0
39.5
39.0
38.5
38.0
37.5
37.0
36.5
4
bruary
198
11
12
13
14
15
19
20
21
22
25
26
27
28
1
4
March
Candles in Context
199
Candles in Context
Hammer,
but??
200
Candles in Context
Not an ideal dark cloud
cover, but??
201
1
a) What are the candle lines at
the arrows at 1 and 2 ?
b) Where would you be more
bullish, at 1 or 2, and why?
c) On what candle line would
you buy after the signals at 1
and 2?
d) If you buy at 1 or 2 where
is a potential protective sell
stop?
202
Nison Trading
Principle
Do not only consider the
markets price. Analyze the
shape and size of candle
lines at that price.
203
204
204
205
206
207
208
Candlecharts.com
Consider risk-reward
209
Nison Trading
Principle
Even a perfect candle signal
does not equal a good trade!
YOU MUST ALWAYS
JUDGE THE POTENTIAL
TRADES RISK-REWARD.
210
Stops
211
Stops
window
212
Obtaining targets
213
hammer
214
DJ INDU AVERAGE
1070
1065
1060
1055
1050
1045
1040
1035
1030
1025
1020
1015
1010
1005
1000
Bullish engulfing
pattern gives a turning
signal with falling
resistance line as a
target
995
990
985
980
975
970
x10
19
215
25
4
March
11
18
25
1
April
15
22
29
6
May
Bearish
engulfing
pattern
13.2
13.1
13.0
12.9
12.8
12.7
12.6
12.5
12.4
12.3
12.2
12.1
12.0
11.9
11.8
11.7
11.6
Rising
window
11.5
11.4
11.3
11.2
Hammer
11.1
11.0
15
22
29
6
May
216
13
20
28
10.9
32.0
31.5
31.0
30.5
30.0
29.5
29.0
28.5
28.0
hammers
27.5
27.0
26.5
Or
26.0
217
20
28
3
June
10
17
1000
900
800
700
600
500
400
300
x1000
24
1
July
15
hammer
218
reward
Risk
219
Risk/Reward
INTL GAME TECH
69.5
69.0
68.5
68.0
67.5
67.0
Pivot
high
66.5
66.0
65.5
65.0
64.5
64.0
63.5
63.0
62.5
62.0
61.5
61.0
60.5
60.0
14
220
22
28
4
February
11
19
25
Ma
Risk/Reward
If you buy
here, what is
the target?
What is the
risk?
221
Risk/reward
With a purchase at
the hammer and a
target to the falling
window we have a
good r/r trade.
222
Risk-reward
Two hammers at 1
and 2. But due to
falling windows only
hammer 2 presents a
buying opportunity
due to the r/r.
223
On this morning
star pattern where
is the stop? And
where is a
potential price
target?
224
On this morning
star pattern where
is the stop? The
low of the pattern.
And pick a
potential price
target. The falling
window and the
high at H where the
sell off began.
225
Subsequent
action
Slide 226
Candlecharts.com
Confirmation
226
Nison Trading
Principle
The more signals- either
candle or Western or a
combination of both
converge at the same level,
the more likely a reversal.
227
Cluster of Candles
228
Confirmation
Bullish engulfing
patterns and bullish
shadows confirming
support zone.
229
230
P.R.O.F.I.T.S
Potent Insights
Reduce Risks
Outmaneuver your competition
Find Pivotal Support /Resistance
Identify False Breakouts
Terminate Bad Trades
Stay Alive!
231
Potent Insights
232
Potent Insights
233
Reduce Risks
234
Reduce Risk
235
Outmaneuver your
competition
236
237
Find Pivotal
Support and
Resistance
238
239
Identify False
Breakouts
240
241
Terminate Bad
Trades
242
243
Stay Alive!
244
245
246
2a Bearish Engulfing
3- Falling Window
4- Bearish Divergence
5- Failure at windows
resistance
4
247
248
249