Japanese candlestccs and paterns

Trading without indicators

-1
Structure of the course
1. Aug 28: structure of a candlestcc, reversal paterns
2. Sep 4: contnuaton paterns
3. Sep 11: candlestccs + indicators, trading breacouts, trading
strategies
Candlestick chart is the most
informative
Structure of a candlestick

Steve Nison, Japanese candlestck chartng techniques

Reversal paterns Contnuaton paterns
• Hammer/Hanging man • Rising/Falling Three Methods
• Morning/Evening star • Upside/Downside Tasuci
• Piercing Line/Darc Cloud Cover • Mat Hold
• Harami • Three Line Strice
• Harami cross • In-Necc/On Necc
• Engulfng
• Tweezers
Engulfng
• Logic: bulls or bears seize the
power
• Consists of 2 contrastng candles
• Looc at the bodies
• Only afer the distnct trend
• Signal is stronger if one body is
small and second is big
• Signal is very strong, when one
candle engulfs many
USD/MXN, D1
USD/JPY, W1
Hammer & Hanging Man
• 1-candle patern
• Logic: shows tredness of the main trend
• Lower shadow is 2-3 tmes longer than
the body. No or small upper shadow
• The body is in the upper part of the range
• The longer the shadow, the stronger the
signal
• The stronger the trend, the stronger the
signal
• Color is not important
EUR/USD, D1
Shooting Star & Inverted Hammer
• 1-candle patern
• Logic: shows tredness of the main trend
• Upper shadow is 2-3 tmes longer than
the body. No or small lower shadow
• The body is in the lower part of the range
• The longer the shadow, the stronger the
signal
• The stronger the trend, the stronger the
signal
• Color is not important
The signal is stronger if there’s a gap away
from the prior real body.
EUR/GBP, H4
Harami

• 2 contrastng candles
• Body of the frst candle overlaps
body of the second one
• First – mother, second – child
• Confrmaton is always
necessary!
Inside bar Inside bar +
Fakey
USD/JPY, H1
Fakey
AUD/USD, MN
Dark cloud cover
• 2 contrastng candles with big
bodies
• Second candle opens with a gap
up, but is bearish
• Second candle overlaps the most
of the frst candle’s body
• Signal is stronger when the
second candle is below
important resistance
Piercing line
• 2 contrastng candles with big
bodies
• Second candle opens with a gap
down, but is bullish
• Second candle overlaps the most
of the frst candle’s body
• Signal is stronger when the
second candle is above
important support
USD/CAD, MN