Candlestick Course

Steve Nison’s Unleashing the Profit Power of Candlesticks
With
Steve Nison, CMT

President: Candlecharts.com
Candlestick Candlesticks +
Charting Western
Techniques Indicators
Candlesticks + Trade Management
 Quick review of candlestick essentials

 Using Yorikiri candles as
support/resistance
 Importance of shadows
 Helping to avoid buying on false breakouts
 Candlestick pattern variations for FX
 When to use a candlestick signal for a new
trade and when to use to exit an existing
trade.
 Using candlesticks as protective stops
 Trading breakouts with candlesticks
 Importance of short term trend
 Correctly using single and double
candlestick patterns
 Steve’s favorite candle signal
 Secrets of intraday candles for day and
swing traders
© 2013 candlecharts.com 1
 Using candlesticks + West for

increased trade confidence
 Change of Polarity
 Falling off the Roof
 Crack and Snap
 Candlesticks in context
 Adapting to the market
 Candlestick confirmation
 Steve’s most important trade

management rule
Profit Leakers
Markets of your choice
Section 1:
Nison Candlesticks
• Easy to Understand
• Early Reversals
• “Safety First”
• East + West
• All markets
• All Time Frames
• Accelerates Analysis
ANATOMY OF THE CANDLESTICK LINE
high Shadow
close open
Real
Body
open close
low
Real Bodies / Shadows
www.candlecharts.com
Profit Leaker
Reading the message of the candlestick line
The longer the

real body the
stronger the
momentum.
For FX traders this is a good
substitute for volume
“The Real Body is the Essence of the Price Movement”
Who’s in control?
Finding “Hidden”
Support/Resistance
Yorikiri Candlesticks
2nd
resistance
1st support
(50% of entire
1st
candle) resistance
(50% of entire
candle)
2nd support
Center Tall White
Center of Long White Candle as Support
Center Long Black Candle
Retracements
(B) $200
38.2%($162)
50% ($150)
61.8% ($138)
(A)
$100
Very Long Real Bodies as Support
Very Long Real Bodies as Resistance
Fib retracement
Very Long Real Bodies as Resistance
Very Long Real Bodies
Basic Criteria:
Small real body - black or white
Market Implication:
Immediately preceding trend
losing momentum.
Who’s in control?
WHY THE BEST TRADERS USE NISON CANDLES
Higher highs, lows and

closes. Look at the shrinking
real bodies. Does the
market still look good?
DOJI AND SPINNING TOP
Basic Criteria:
• Market in up or down trend
• Open and close prices are the same
(or nearly the same)
Market Implication:
Market at a point of indecision
Negative Selection
You saved $35/share by NOT going long here
One of the best ways to make money?
Saved from a 19% decline
Candles can be used in all time frames
“Market is
tired”
Profit Leaker
Doji Confirms resistance
Candles in Context
Analyze these doji in the context of what happened before. Are

any of these a more likely reversal and why?
A B C
Volumes 1+2 of Nison Educational Series
Streaming video or DVDs
More details about this at www.nisonspecial.com/unleashedsale
Be sure to order from your special link at

www.nisonspecial.com/unleashedsale
Regular price at candlecharts.com
Special limited time price at

www.nisonspecial.com/unleashedsale
Profit Leaker
Use the highest high of

those two sessions (top
of upper shadow) as
resistance
Doji as Resistance
Doji as resistance
Candles and Momentum Trading
MKt at 90 1/2
Buy the 90 call @ 2.12
5 days later sell to cover with
mkt at 94 ½ @ 4.61 Look at all the
More than 100% profit reversal signals
45
Nison Chart Challenge
Tell me about how you

view each of the three
2 doji with the idea of
prior trend, overbought,
confirming a technical
1 signal, etc
Profit Leaker
Reading the Message of the candle line
The longer the real

body the stronger
the momentum.
The relative size

and position of the
shadow displays
the extent of price
rejection.
Shadows
Remember: location and size of the shadow should be considered when

analyzing the market psychology.
Implication: Bearish long upper shadow offsets “rallying strength.”
Bullish long lower shadows hints bears losing force.
Candles help us read the markets 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?
Shadows in Context
Small real
bodies but bull
shadows
Long Lower (Bullish) Shadows
Over 10% move in just a few days
Although this market is

descending, the long lower
shadows offsets some of
the negative outlook
Basic Criteria
• Market in a downtrend
• Small real body (either color) at, or near,
top of range.
• Lower shadow at least 2x height real body
Market Implication
“A chance to buy at the bottom “
Support
Low of hammer as support
Psychology – Strong demand
Using candles to enter and exit
Using Candles across the spectrum
Hammers
What does this say?
Profit Leaker
Introducing:
Nison Candle Scanner for the Free
NinjaTrader platform
With 28 Nison Certified

Candlestick Signals
Is it a valid Nison candle?
Not hammers!
Seminar Bonus
INSTANT Free Upgrade from NCS

to NCS PRO:
Pro version includes the Intraday
and FX Modules
$1,490 value!
The market will often retest the

lower shadow of the hammer
Retest of hammer’s shadow
Take $4 share profit here
Buy here
Retest of hammer’s shadow
hammer’s lower shadow as Support
Monday March 4
at 9pm NY time
Will be recorded
Why Protective Stops
Which are hammers and why?

2
1
5
4
3
Benefits of Options- Leverage
Buy at 144.50 on hammer

Sell at 151.50 (failure to hold
over resistance)
% gain on stock = 4.8%
Buy ATM 145 call @ $4.75

Sell to close call 11 days later
for $8.11
% gain on options = 71%
www.nisonoptionsacademy.com
Nison Candlestick strategies for long calls
Scenario 1 – buy at hammer

Mkt @ $395: 400 call @ $11.30
Exit at doji ( red arrow 13 days

after hammer) mkt @ 447: 400
call @ $47.50 (320 % return)
Scenario 2 – buy based on MACD

Mkt @ $418 : 420 call @ $13.45
Exit at doji (5 days later) mkt @

447: 420 call @ $31.20 (132%
return)
Result: Nison candlesticks

generated over 2x the profit!
Direction
blows away
implied
volatility
Direction is the single most important thing you need

to know to make money on any options trade
Implied Volatility vs. Direction
AAPL
1) Hold IV constant at 26% and price +20% over 30 days
APPL @ 300: 60-day 300 call = $12.70
APPL @ 360: 30-day 300 call = $60.10
2) Hold Price Constant at $300 and IV +20% over 30 days

300 strike 60-day call: Vol @26% = 12.70
300 strike 30-day call: Vol 31.2% = 10.70
Result:
20% change in price = +$47.40 (374% gain)
20% change in Vol = -$2.00 (15% loss)
Nison Candlestick Secrets For Profiting in Options
Quickly finding the best opportunities in the options markets
Basic Criteria:
• Market in up trend
• Small real body (black or white) at,
or near, bottom of session
• Upper shadow at least twice height
of the real body
Market Implication:
Potential top reversal
Resistance:
High of signal as resistance
Shooting Star “signals trouble overhead”
Reading the Market’s Message
“A crack has entered the market ”
Shooting Stars as Resistance
Shooting Stars
Profit Leaker
What is
wrong with
this so called
“shooting
star?”
Hint: look at upper shadow
Basic Criteria
• Market in down trend
• White real body wraps around prior
session black real body
Market Implication
Bottom reversal
Support
The lowest low of the two sessions
of the pattern
Bullish Bearish
Classic Bull Engulf
Bullish engulfing pattern + shadows

f
Lower closes, but

what are shadows
hinting?
Bullish Engulfing Pattern
How many black candles did

this wrap around?
Anything
hinting bears
losing force?
open
open
close
Candles in Context
Hi Steve,
I was a simulcast attendee of your recent seminars, as well as I am a member of My

Candlecharts.com. Thanks for all the education. My question is about the Daily
close on New Zealand Dollar / US dollar chart (attached for easy reference). We
got a Bullish Engulfing pattern but with a long upper shadow. What is the
significance of the long shadow?
Thanks a lot in advance.
Regards,
Hussam A.
Series of Bullish Engulfing Patterns
Bullish Engulfing Pattern as Support
Basic Criteria
• Market in down trend
• Opens below prior low (or close)
• White candle closes more than 50%
into prior black real body
Market Implication
Bottom reversal
Support
The lowest low of the two
candlestick lines
1 2 3
On–neck In–neck Thrusting Piercing

close= close= close above Pattern
prior low prior close prior low
(small white (small white
candle) candle)
Patterns 1,2 and 3 are viewed as small, reactionary rallies where the bulls counter drive
is weak. “Selling chase begins” under any of these patterns for momentum traders. 108
Piercing Pattern
Piercing Pattern
Not Piercing Patterns
Early clues of shifting supply/demand
Basic Criteria
• Black real body wraps around prior
session opposite color real body
Market Implication
Top Reversal
Resistance
The highest high of the two sessions
of the pattern
Basic Criteria
• Open of black candle can be at close
of prior white candle
Market Implication
Top Reversal
Resistance
The highest high of the two sessions
of the pattern
Bearish Engulfing Pattern
Bearish Engulfing pattern as resistance
Candles: Support and Resistance
Why the best traders use Nison

candlesticks
Bottom
outside
reversal
Western Outside Reversals
Top
outside
reversal
Bottom
outside
reversal
Engulfing Patterns and Outside Reversals
B
C
1) What candle clues were there in the circled

area at A?
2) What was happening to the highs at A?
3) Why concept does 1 and 2 show that increase
odds of a turn? And would you sell short or
adjust longs?
4) Why wouldn’t we be selling short at B with the
spinning top and doji?
5) What pattern is at C?
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 education , I
would never would have known that and
would have assumed that he was right. And
could have lost a lot of money!
Thanks again for your great work!

-Carl
Basic Criteria
• Opens above prior high (or close)
• Black candle closes deeply into
prior long white candle
Market Implication
Top reversal
Support or Resistance
The highest high of the two lines
that make up the pattern
Dark Cloud Cover
Dark Cloud Cover as Resistance- FX
Dark Cloud Cover- Futures
Chart courtesy of Genesis FT
Dark Cloud Cover - Stock
Dark Cloud Cover as Resistance - Intraday
Profit Leaker
CRITERIA
• 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
bottom)
• 2nd candle must reflect diminishing of prior
force
Source: HAJIMETE KABUKA CHATO WO YOMU HITO NO

PATTERN PSYCHOLOGY
The first candle shows bulls (tweezers top)
HON by K. Hoshi
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.
 The more the 2 nd 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 2 nd candle (i.e. piercing
pattern, shooting star).
 Not used as support or resistance or
momentum trading unless 2 nd candle is
a reversal candle.
 If both candles for tweezers top close
at, or near the highs, or tweezers
bottom close at or near the lows, this
Source: HAJIMETE KABUKA CHATO WO YOMU HITO NO
HON by K. Hoshi pattern would have less significance.
Tweezers top
Think this market had troubles near $8.20?

Tweezers top
Why is this not

a Tweezers
bottom?
Tweezers Bottom
A rising window is support
Support
Zone
Most important
support level
Rising Window
Rising Windows
Broken Windows
Once the window is broken

it is no longer potential support
Rising Window
Rising Window Hammer
1. What are the reversal signals?

2. Where is potential support?
3. Any signals confirming
support area forecasted in #2?
With these bearish signals

you would have captured
$400 -$500 on 100 shares
Chart Challenge- answer
1. What are the reversal signals?

2. Where is potential support?
3. Any signals confirming support
area forecasted in #2?
A falling window is resistance
Most important
resistance level
Resistance
Zone
Falling Window
Breaking Falling window’s Resistance
Falling Window
Falling window
Small Windows
2 cents
CANDLES FOR GOLDEN OPPORTUNITIES OTHERS

WILL MISS
Island bottom
Is this S1?
Chart Challenge
Which hammer (at the arrows)

is a better buy and why?
After the second hammer

where would you exit and why
CHART CHALLENGE
2
3
On each of these doji would you:

A) Go long
B) Go short
C) Do nothing
1 And explain why
Doji 1
Doji 2
Doji 3
Doji 4
Chart Challenge
1) What 2 candlestick pattern does this

form?
2) If you were long here what would you
do and why?
3) If you had no position would you sell
short here- why or why not?
Secrets of Intraday
Candle Charts
(for Swing Traders):
Using Intraday Windows
Intraday Windows
Most intraday
windows from
one day to the
next
Intra-day window – not a window on daily chart
27th
28th
Intraday Candle Charts
Be more flexible with

candle patterns on
intraday candle charts
than with daily or
weekly candles
White real body that wraps around

prior session black real body or doji.
Intraday
open
close
Black real body wraps around prior

session white real body or doji.
Intraday
close open
NCS Pro (which

includes FX and
Intraday
modules) takes
this variation into
account
Secrets of Intraday
Candle Charts
Finding “Hidden”
Support/Resistance
Using intraday charts to uncover “hidden” support: 1 of 3
On this daily chart where is

Daily first support after this tall
white candle on April 15?
Let’s go to the intraday….
Intraday
April 15
On this daily chart we see what

occurred after April 15
Daily
Support zone
obtained from
intraday chart
Secrets of Intraday
Candle Charts
Finding the Extra Early
Reversal Areas
Intraday Candles for Early Reversals
Hammer on
this daily chart
gives reversal
at $53.05
Hammer on
this intraday
chart gives
reversal at
$49.09 on the
same day
Secrets of intraday Candles
Intraday
Daily
Dec 9
Using
intraday
get buy
signal
here
Intraday for Swing Traders – earlier reversals 1 of 2
Let’s look at this

daily session from
an intraday
perspective
Bull hammer signal at $50.79
Intraday for Swing Traders – earlier reversals 2 of 2
On daily chart got bullish hammer

at $50.79. On this 5 minute chart
got reversal more than $2 earlier with
this bullish engulfing pattern.
Bull signal at $48.68
Harnessing the insights of intraday candles
Hello Steve,
I attended your seminar in NY. Please

attached find the log of my trade on
EUR/USD. The first picture shows my
short entry based on a daily chart's
Shooting star which confirmed the
Resistance.
Later on the 4hr. chart, a Doji

appeared which confirmed the
support level. I exited the trade with
+61 pips.
If you have any

comments/suggestions, please feel
free to do so. “The first picture shows my
short entry based on a daily
Many thanks, chart's shooting star which
Frank C. confirmed the resistance at
bearish engulfing pattern.”
Harnessing the insights of intraday candles
Daily chart reversal with

shooting star at 1.2900. With
Resistance area from the reversal on intraday at
bear engulf on daily
1.2930 Frank would have
chart
improved his profit by 50%
“Later on the 4hr. chart, a

Doji appeared which
confirmed the support
level. I exited the trade
with +61 pips.”
Secrets of Intraday
Candle Charts
(for intraday traders):
Monitoring Daily
Support/Resistance
Daily chart for support ( 1 of 2)
June
26
We are thinking of buying on the session at the arrow as market

approaches solid band of support 43.25 on June 26. Let’s turn to
Buying
an intra-day chart to see if there are any buy signals as the stock
area
nears 43.25 ….. (see next chart).
Intra-day to place trade on confirmation of support ( 2 of 2)
On this 5 minute chart on

June 26, the dashed line
shows support area obtained
from prior daily chart near
43.25. The hammer at this
support was the buy signal
Hammer
1. What pattern is highlighted?

2. When would you sell short based on this pattern?
Chart Challenge – Part 1
What would you do

here if long/why?
1.What two candle signals formed here?

2.Are these confirming something else?
3.Where would you have R1 and R2
Chart Challenge – Part 2
What would you do here if flat (no position)?
Profit Leaker
Steve Nison’s Four Cs

for Trading Success
Candlesticks in Context
Candles in Context
“To know where

you stand is as
important as
candle pattern
recognition.”
Candles in Context
Shooting
Star, but…
How education SAVES you money
Bearish engulfing
pattern, but you must
not sell here!
Profit Leaker
How NOT to use candlesticks
Oh my goodness! The
market rallied after the
shooting star!

for Trading Success
Confirmation
FED DEPT STRS 44.5
During this time, the 44.0
market is ascending. 43.5

However, what are
reasons for caution? 43.0
42.5
42.0
41.5
41.0
40.5
40.0
39.5
39.0
38.5
4 11 18 25 1 8 15 22 29 6 13 20 28 3
March April May June
Section 2:
Nison Candlesticks +
Western indicators
The Multiplier Effect
Candlesticks and
Trendlines
This doji is showing a Is this doji telling us there is

shift in psychology since something different about the
it comes during a rally market?
Doji in a Box Range
Doji in Context
There is no trend to
reverse with this
doji– thus we
ignore it.
Scenario
1
Scenario
2
Candles and Trend lines
Doji confirms resistance
How Education Saves You Big $$$
Major resistance 2.00-2.01
Long term resistance zone
Long term resistance

zone
The Value of Owning the Knowledge
Candles and Trend Lines
Congratulations –
you bought at
support!
Congratulations?
– you bought at
support?
© Steve Nison’s Candlecharts.com
Resistance
Resistance
Support
Support
Change of Polarity
Change of Polarity
Change of Polarity
Don’t look through a well!
1
3
Why would we trade differently with Piercing Patterns

4 and 5, compared to Piercing Patterns 1,2 and 3?
Hint: “Change of Polarity” 4
Profit Leaker
How Education helps SAVE and MAKE you money
Liquidated my stock portfolio
Entered the market here
How Education helps SAVE you money
Evening star variation
Exited my stocks here
How Education helps MAKE you money
Entered the
market here
Morning star variation
Target
Snap
Buy
Stop
Crack
Crack and Snap
Crack and Snap
Crack and Snap
Crack and Snap
Stop
Sell
Target
Falling off the Roof
Falling Off the Roof
Falling off the roof/subjectivity
Stop out level
Section 3:
Nison Candlesticks +
Trade Management

for Trading Success
Confirmation
Chameleon
Adapting to the Market
Trend is down
target
Adapting
The low of the

bullish engulfing
pattern as
support. Once
hammer is formed
(at the arrow) we
then adjust our
support
Adapting to the Market
Closed over
Window’s
Resistance
Candles in Context: 1 of 2
Which is a better sale?
Scenario 1 Scenario 2
Candles in Context: 2 of 2
Which is a better sale?
Scenario 1 Scenario 2
Nison Insider Access - Sample Question
Why I went long:
1) Bullish engulfing at
Bullish engulf
support
2) Trend line breakout

of price
Was this a good trade

that just didn't work out
or did I make a mistake
in judgment that I can't Support
see?
Thank you, What do you say? Did he

Gary B make a mistake? If so what?
Profit Leaker

for Trading Success
Confirmation
Chameleon
Consider Risk-Reward
Risk/Reward
Buy XYZ at 100
Support at 96
Price target (i.e resistance) at 108
Risking 4 looking to make 8 gives a 1:2 risk/reward
Importance of protective stops
Same Signal- but how different the strategy!
Candles and Risk – Reward: part 1
Candles in context
Bullish
engulfing
pattern that
wraps around
3 red candles,
but…
Candles in context – Crack and Snap
Crack and snap,

but where is R1?
Candles and Risk - Reward: Part 2
Streaming video or DVDs
HERE ARE JUST SOME OF THE

BRAND NEW STRATEGIES YOU WILL LEARN:
 New: The order of power for each candlestick signal

 New: Nison 360° Candlestick Analysis for each
pattern
 New: Steve’s favorite western indicator
 New: The best time periods for moving averages
 New: How to let your profits run
 New: Using both western and price confirmation
 New: Nison Insights for each pattern
 New: Candles and Sectors/ETFs
Nison Candles for Higher Profits
Let’s see how candles +

west called the lows
before a 1600 pip rally.
Nison Candles + West for Higher Profits
Nison Candles for Higher Profits
Small real bodies and

doji near $710
Falling window at
$700 confirms a top
Bearish moving
average dead cross at
$650
Result: an extra
$5000 on 100
shares in your
pocket thanks to
correct use of
candlesticks!
Candles for Higher Profits

Using options
Falling window at
$700 confirms a top.
$700 put @ $25
Bearish moving
average dead cross at
$650. $700 put @$58
Result: an extra
$3300 in your
pocket on one
options contract!
Markets of your choice

Candlestick Course

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Steve Nison’s Unleashing the Profit Power of Candlesticks

Steve Nison, CMT

Candlesticks + Trade Management

 Quick review of candlestick essentials

 Using candlesticks + West for

 Falling off the Roof

 Crack and Snap

 Adapting to the market

 Steve’s most important trade

Markets of your choice

ANATOMY OF THE CANDLESTICK LINE

Real Bodies / Shadows

Reading the message of the candlestick line

The longer the

“The Real Body is the Essence of the Price Movement”

Center Tall White

Center of Long White Candle as Support

Center Long Black Candle

Very Long Real Bodies as Support

Very Long Real Bodies as Resistance

Very Long Real Bodies as Resistance

Very Long Real Bodies

WHY THE BEST TRADERS USE NISON CANDLES

Higher highs, lows and

DOJI AND SPINNING TOP

You saved $35/share by NOT going long here

One of the best ways to make money?

Saved from a 19% decline

Candles can be used in all time frames

Doji Confirms resistance

Analyze these doji in the context of what happened before. Are

Volumes 1+2 of Nison Educational Series

Streaming video or DVDs

More details about this at www.nisonspecial.com/unleashedsale

Be sure to order from your special link at

Regular price at candlecharts.com

Special limited time price at

More details about this at www.nisonspecial.com/unleashedsale

Use the highest high of

Candles and Momentum Trading

Nison Chart Challenge

Tell me about how you

Reading the Message of the candle line

The longer the real

The relative size

Remember: location and size of the shadow should be considered when

Candles help us read the markets message

What do the series of bullish shadows tell

Long Lower (Bullish) Shadows

Over 10% move in just a few days

Although this market is

Psychology – Strong demand

Using candles to enter and exit

Using Candles across the spectrum

What does this say?

With 28 Nison Certified

Is it a valid Nison candle?

INSTANT Free Upgrade from NCS

More details about this at www.nisonspecial.com/unleashedsale

The market will often retest the

Retest of hammer’s shadow

Take $4 share profit here

Retest of hammer’s shadow