Introduction

How to read the candlestick chart Candle sticks and Definition of Terms
market terminology
Real Bodies Oversold
Technicals are the only way to measure the
emotional component of the market
When a lot of people sold their stocks. A
good indicator of recovery.
The Japanese puts great
emphasis on the Open and
Overbought
Closing of the trading day

When a lot of people bought

Most emotionally driven
stocks. A good indicator that it will
Bearish Periods point of the day
go down in price soon.

When Open is "The first hour of the morning is

Divergence
higher than Close the rudder of the day"

A relationship between price and

The opening of the day indicates
technical indicator where it doesn't
where the market is heading
agree with one another

Crossover

Bullish Periods When the line of one

indicator cross with another

When Close if
higher than Open Support

Range between An area where price is expected

Open And Close to stop declining after a selloff.
Buyers waiting to buy.

Spinning Tops
Resistant

A close battle between

Open and Close Area where it's difficult for price
to go up. Heavy selling.

Breakout

Price movement that got out

Shadows of resistance after a long consolidation

Little lines that indicates High and Low Pullback

Not as important Term used to describe a

as real bodies temporary decline in price after
a previous upward move

Doji Lines
Rally

A continued, uninterrupted rise in price

Paper Profit

A symbolic gain.
Happens when Opening and
Closing are very similar
Paper Loss

What determines the

meaning of a candlestick? A symbolic loss.

Size Tick

Minimum increment(up
and down) of price

Oscillator

Long Candle
Technical indicator that signifies
increment between 0 and 100
Open and close
are far apart
RSI and STS

Reflects a day of large

price movement Correction

Decline in 10% or more in the market.

This is very, very bearish.

Gap

Short Candle Empty space between candlesticks on

the chart. Happens when price leaps
up or down sharply.
A narrow price movement

Time Frame
Insignificant candle

Position Trading
A symbol of
indecisiveness
Start their position at the beginning of a trend
and only end when the trend stops. Holds
Important to understand whether its in a
position for weeks and months.
continuation or a reversal pattern

Swing Trading
Consolidation

Starts from the beginning of a

Location
momentum and ends when the
momentum fades. Trade within days
Color
Day Trading
Important in determining whether it is
a bullish or a bearish day
Getting in and out of a trade in a
matter of seconds or minutes. Trade
Momentum and Non-momentum within the day itself.

Observe the length About the PSEi

of the real bodies
It's a collection of 30 major
Non-momentum/Weak Candles companies in the Philippines

A sign of weakness. A sign

of trend reversal.

Usually occurs after a

momentum of long candles

2 or more short candles seen

during trend moves

Momentum/Energy Candles

2 or more long candles seen

during trending moves

Direct price into a certain

direction, be it up or down