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Steve Nison Profiting in Forex
Steve Nison Profiting in Forex
By
Steve Nison, CMT
President: Candlecharts.com
Tel: 732-254-8660 Fax: 732-390-6625
Web site: www.candlecharts.com E–mail: nison@candlecharts.com
Overview
Construction of the Candle Line
Power of Single Candle Lines
Insights of the Candle Patterns
Forex and Non Forex Candle Patterns
Blueprint for Forex Trading Success
East meets West
U i Intraday
Using I t d candles
dl
Money management
Trading Psychology
The Candlestick Screener
Screener™
™
1
Constructing the
Candlestick Line
high Shadow
close open
Real
Bod
Body
open close
low
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2
Bulls vs. Bears
Th Real
The R l Body
B d is
i the
th Essence
E off the
th Price
P i Movement
M t
Who’s in control?
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3
Small Real Bodies
(
(spinning tops))
C
Criteria Small real body – color
S
not important
Implication Prior trend is losing
force
o ce
Chart courtesy
y of Genesis FT
Chart courtesy
y of Genesis FT
Chart courtesy
y of Genesis FT
Chart courtesy
y of Genesis FT Although
g descending,g, the small real
bodies offset some of the negative
outlook
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8
Doji
Chart courtesy
y of Genesis FT
Which of these
scenarios is a more
likely top reversal?
S
Scenario
i 1 S
Scenario
i 2
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13
Doji in Forex
Chart courtesy
y of Genesis FT
Concept:
C t Doji
D ji in
i a “Box
“B Range”
R ” is
i
To use a northern doji as not a trading signal
a signal we need to have
p
an uptrend to reverse
Chart courtesy
Chart
y of
courtesy
Genesis
y ofFT
Genesis FT
Chart courtesy
y of Genesis FT
Chart courtesy
y of Genesis FT
Criteria:
• Small real body at,
at or near top,
top of range
black or white
• Lower shadow at least 2x real body
• Market in down trend
Implication: ‘Groping
Groping for a bottom
bottom”
Chart courtesy
co rtes of Genesis FT
Chart courtesy
y of Genesis FT
black or white
Criteria:
• Small real body at,
at or near bottom,
bottom of range
• Upper shadow at least 2x real body
• Market in an up trend
Implication: ‘Signaling
Signaling Trouble Overhead”
Overhead
Chart courtesy
y of Genesis FT
Bearish Checkmate:
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”
Bullish Checkmate:
A series of long black candles followed by white
candles or small real bodies near the same
support level. It reveals that the bears’ drive is
being
g “checkmated”
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36
Bull Checkmate 1 of 2
Checkmate area
☺ ☺
Chart courtesy
y of Genesis FT
•Implication:
p c o : Market
e bottoming
bo o g out
ou
open
open
close
Checkmate area
Chart courtesy
y of Genesis FT
Ch t courtesy
Chart t off G
Genesis
i FT
Chart courtesy
y of Genesis FT
open
close open
Criteria:
•Black real body wraps around
preceding white real body
•Market in up trend
Implication: ‘Bulls
Bulls have been
constrained”
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44
Bearish Engulfing Pattern
Chart courtesy
y of Genesis FT
Chart courtesy
y of Genesis FT
Chart courtesy
y of Genesis FT
Bullish Bearish
Chart courtesy
y of Genesis FT
Implication: “Advance
Advance is exhausting
itself”
Weekly
Weakly
Chart courtesy
y of Genesis FT
Chart courtesy
y of Genesis FT
Didn’t get
g
deeply into
white candle
Criteria:
• Market moving south
• Opens below prior low (or close)
• White candle closes more than halfway
into prior long black candle
Criteria:
• Market moving south
• Opens at (or near) prior close
• White real body close more than
halfway into long prior black candle
Implication:
li i “hi
“hint that
h the
h d
decline
li iis
exhausting itself”
Not a piercing
pattern
Piercing pattern
Chart courtesy
y of Genesis FT
Chart courtesy
y of Genesis FT
c
d
Chart courtesy
y of Genesis FT e
Bearish
i
white or black
Criteria:
• First candle is unusually long white or
• Second real body spinning top or doji black
• Second real body within prior real body
• Second real body can be black or white Bullish
66 Implication: ‘Change in flow of market”
Forex Harami
Bearish
i
black real body
Criteria:
• First candle is unusually long
white
• Second real body spinning top or doji
• Second real body within prior real body
• Second real body opposite color Bullish
67 Implication: ‘Change in flow of market”
Bear Harami
Not harami
Chart courtesy
Chart ycourtesy
of Genesis
y of Genesis
FT FT
Ch t courtesy
Chart t off G
Genesis
i FT
Chart courtesy
y of Genesis FT
Bearish
Bullish
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72
Non Forex Morning Star
Criteria:
• Market in down trend
• First candle long black
• Second
S d reall b
body
d ((spinning
i i ttop, blblackk or
white) doesn’t overlap first session’s real
body
• Third candle ((white)) closes deeply
p y in
first black real body
white or black
73
Forex Morning Star
Criteria:
• Market in down trend
• First candle long black
• Second
S d reall b
body
d iis bl
black
k or d
doji
ji
• Third candle (white) closes deeply in
first black real body
Most
time
black
or doji
74
Morning Star Confirms Support
Chart courtesy
y of Genesis FT
Criteria:
• Market in an up p trend
•First candle is long white
• Second real body (black or white
spinning top) doesn’t overlap first
session’s real body
• Third candle (black) closes deeply in
first white real body
76
Forex Evening Star
Most time
white
hit or
doji
Criteria:
• Market in an up p trend
•First candle is long white
• Second real body is white spinning
top or doji
• Third candle (black) closes deeply in
first white real body
77
Evening Star
Chart courtesy
y of Genesis FT
Chart courtesy
y of Genesis FT
Chart courtesy of Genesis FT
Bear Engulf
Near
resistanc
e–
would
you sell
short?
Chart courtesy
y of Genesis FT
82
Slide 34
DISCIPLINE:
Your Blueprint for
Forex Trading Success
83
Don
Don't
on't
on t ever forget
risk-- reward
risk
84
Nison Trading Principle #4
Even a “perfect”
perfect candle signal
does not equal a good trade!
YOU MUST ALWAYS JUDGE
THE POTENTIAL TRADE’S
RISK-REWARD
Chart courtesy
y of Genesis FT
Let’s
Let s think about this R/R
Chart courtesy
y of Genesis FT
90
Don’t Stay Around
Target
Chart courtesy
y of Genesis FT
92
Stops 1 of 2
What if
it went
to
here?
Would
you
still
want
to be
short?
Target
96
Nison Trading Principle #12
Chart courtesy
y of Genesis FT
Change of Polarity
Price Targets
Oscillators
Bollinger Bands
Fibonacci Retracements
Record Sessions
100
Confluence
102
The Candlestick
Screener™
103
Using the Candlestick Screener™
Screener™ 1 of 3
Chart courtesy
y of Genesis FT
Chart courtesy
y of Genesis FT
Chart courtesy
y of Genesis FT
Chart courtesy
y of Genesis FT
Doji
Hammer
Chart courtesy
y of Genesis FT
Congratulations – you
bought at support!
Congratulations? –
you bought at
support?
110
Change of Polarity
Resistance
Resistance
Support
Support
111
Change of Polarity
Resistance
Support zone
becomes …
Chart courtesy
y of Genesis FT
Doji
Prior support
becomes new
resistance
Snap
Buyy
Stop
Crack
115
Falling off the Roof
Stop
Sell
Target
g
116
Crack and Snap
target
Doji
confir
ms
resista
nce
Chart courtesy
y of Genesis FT
Chart courtesy
y of Genesis FT
Head Right
g t
Left
f Shoulder
S Shoulder
Neckline
Sell
signal
Head and Shoulders Top
124
Three Buddha Pattern
125
Applying Western Techniques to Candle Charts
Neckline
LS
RS
Head
April 6
Target
Piercing pattern
 Objective
 Separate from price
 Overbought/Oversold:
too far too fast?
 Divergence
130
Candles in Context of Overbought/Oversold
2
1
1
2
Price Price
1
2
2
1
Oscillator Oscillator
132
East & West
Hammer
and
positive
divergen
ce
Chart courtesy
y of Genesis FT
Doji warn
market is
tired.
Confirming Correction
resistance at ends with
upper piercing
Bollinger pattern at
Band lower
Bollinger
Band
Bearish
i h
Shooting Star engulfing
pattern
Both patterns
confirmed upper
Bollinger Band
38.2% (162)
50% (150)
% ((138))
61.8%
((A)) 100
$100
142
Candles & Fibonacci
Hammer
Hammer
confirming 50%
confirming 50%
retracement
retracement
Bullish
lli h
engulfing
pattern
Chart courtesy
y of Genesis FT
Hammer
Chart courtesy
y of Genesis FT
Bearish
engulfing
pattern
confirming
upper Bollinger
Band
Bullish Harami
Support
at 50%
Fib
retracem
ent
147
Candles in Context
Morning star
but ???
Ch t courtesy
Chart t off G
Genesis
i FT
Chart courtesy
y of Genesis FT
Whata are
a
2 reasons
not to
short on
this
shooting
star?
O
Oversold?
ld?
Oversold?
3
2
Chart courtesy
y of Genesis FT
7
1
2 1
23
6 3
4
5 Haven t made
Haven’t
5
a lower low
4 and now
relieved
3
1 1
2 potential
2 oversold
3 4
situation so
5
6 count starts
7 again
8
9
10
156
Intraday Candlesticks
Flexibility
y
157
Flexibility with Candle Signals
close open
Chart courtesy
y of Genesis FT
Intraday Traders:
Daily
D il Charts
Ch t ffor S
Supportt
or Resistance
159
Daily Chart for Support/Resistance 1 of 2
Daily Chart
We are thinking of
buying on the session
at the arrow as
market approaches
important support
near 137 on Feb. 27.
Let’s turn to an intra- Feb. 27
day chart to see if
137.07
there are any buy
signals as the
Chart courtesy of Genesis FT
Euro/Yen cross nears
ask@candlecharts.com this USA
732.254.8660 level ….. (see next
160
chart).
… and then use daily support/resistance on intraday chart 2 of 2
Intraday Chart
Target Zone
Feb. 27
Chart courtesy
y of Genesis FT
Daily Chart
Intraday Chart
Potential
Target
Resistance zone
Chart courtesy
y of Genesis FT
Resistance zone
From daily chart
Potential Targets
Chart courtesy
y of Genesis FT
Intraday
Chan
ge of
polarit
y for
buyin
g
Chart courtesy
y of Genesis FT
Daily
June 5
Chart courtesy
y of Genesis FT
Swing Traders:
Intraday Candlestick
Charts to Improve Timing
168
Why Intraday – even if you are not a day trader 1 of 4
Wh t about
What b t risk/reward?
i k/ d?
Chart courtesy
y of Genesis FT
April 3 - 60 minute
Chart courtesy
y of Genesis FT
April 3 - 30 minute
Chart courtesy
y of Genesis FT
Buy on close?
Intraday buy
Chart courtesy
y of Genesis FT
Close on April 6
Short at 122.29?
122 29? Or
Signal
at
123.05
Target
April 6
Swing Traders:
Intraday Charts to Confirm
Support or Resistance
174
Harnessing the Extra Insights of Intraday Candles 1 of 2
177
Using Intraday Charts to Get Earlier Reversals 1 of 2
Morning Star
P tt
Pattern confirmed
fi d
July 19 at 1.2593,
now let’s
Chart courtesy
y of Genesis FT go to intraday
g y ….
Hamm
a Morning Star Piercing Pattern
er completed completed
comple at 1.2488 at 1.2488
ted
at
1.2481
180
The water looks fine…. 1 of 2
183
Long Lower (Bullish) Shadows
Chart courtesy
y of Genesis FT
186
Nison Trading Principle #18
potential
target
potential
target
S1
S2*
S1*
Anything new?
S1
S1*
Stop
Short
Target
g
Target
Anything happening
to change your
outlook?
Information is Power!
Learn how to avoid losing
Forex trades
200
Slide 52
W
Warren Buffet’s
B ff t’ Rules
R l off
Money Management
Rule 2 – Don
Don’tt forget rule 1
201
Achieve PEAK
Trading performance!
202
Early Reversals
Chart courtesy
y of Genesis FT
Chart courtesy
y of Genesis FT
Money Management
205
Steve Nison’s Profiting in Forex:
Using Candlesticks to Catch
the Next Move
Special Bonus:
Ste e Nison’s
Steve
Forex Trading Lab
with
St
Steve Nison,
Ni CMT
President: Candlecharts.com
Tel: 732-254-8660 Fax: 732-390-6625
Web site: www.candlecharts.com
www candlecharts com
E–mail: ask@candlecharts.com
Case Study 1
1
Case Study 1 – Answer
Chart courtesy
y of Genesis FT
2
Case Study 2 – Part 1
3
Case Study 2: Part 1 – Answer
4
Case Study 2: Part 1 – Answer
5
Case Study 2: Part 2
6
Case Study 2: Part 2 – Answer
7
Case Study 2: Part 3
Is 3 a hammer?
8
Case Study 2: Part 3 – Answer
Is 3 a hammer?
What pattern is 4?
10
Case Study 2: Part 4 – Answer
What pattern is 4?
None- trend is wrong
11
Case Study 2: Part 5
What pattern is 5?
12
Case Study 2: Part 5 – Answer
What pattern is 5?
Bearish Engulfing Pattern
13
Case Study 3
1
2 3
What candle
indicators were
there at 1-4?
14
Case Study 3 – Answer
1
2 3
15
Case Study 4
What are
the signals
hinting of
trouble?
16
Case Study 4 – Answer
4 What are
the signals
hinting of
trouble?
1 2
3
1- doji and harami
2- bearish engulfing
3- bearish engulfing
4- resistance
17
Case Study 4: Part 2
18
Case Study 4: Part 2 – Answer
3 We could here
19
Case Study 5
1.What reversals
are here?
3. Reasons
for caution
here?
Fibonacci Retracements
2.What pattern
Chart courtesy
y of Genesis FT
20
Case Study 5: Part 1 – Answer
Chart courtesy
y of Genesis FT
21
Case Study 5: Part 2 – Answer
Piercing Pattern
What pattern
Chart courtesy
y of Genesis FT
22
Case Study 5: Part 3 – Answer
Reasons for
caution here?
3 4
1
Fibonacci Retracements 2
Chart courtesy
y of Genesis FT
23
Case Study 6
1. What
1 Wh 3. What is happening
candle signals here regarding bull
warn of force? 5. Any
trouble? reason
for
caution?
4.a)Is this a
piercing
2. Why are these pattern?
h
hammers likely
lik l tto b) Would you
work? buy here?
Chart courtesy
y of Genesis FT
Pause Now- Resume when done
24
Case Study 6: Part 1 – Answer
1. What
1 Wh t
candle Two dark cloud covers
signals warn
of trouble?
Chart courtesy
y of Genesis FT
25
Case Study 6: Part 2 – Answer
Chart courtesy
y of Genesis FT
26
Case Study 6: Part 3 – Answer
3. What is happening
here regarding bull
force?
Spinning Tops
Chart courtesy
y of Genesis FT
27
Case Study 6: Part 4 – Answer
4.a)Is this a
piercing
pattern?
b) Would you
buy here?
Chart courtesy
y of Genesis FT
28
Case Study 6: Part 5 – Answer
5. Any
reason
for
caution?
1- Harami
2- Falling Resistance Line
Chart courtesy
y of Genesis FT
29
What would you do?
Chart courtesy
co rtes of Genesis FT
Pause Now- Resume when done
30
What would you do? – Answer
This is a
bullish
engulfing
pattern, but
l t’ look
let’s l k att
R/R
Chart courtesy
y of Genesis FT
31
What would you do?
1: Bull Engulfing
Pattern at Support
2: Bull Engulfing
Pattern low
33
What would you do?
Assume you
are flat.
What would
you do?
Hint- look at
prior lows.
34
What would you do? – Answer
35
What would you do?: Part 1
Shooting star
36
What would you do? Part 1 – Answer
Shooting star
Ch t courtesy
Chart t off G
Genesis
i FT
37
What would you do? Part 2
Shooting star
38
What would you do? Part 2 – Answer
Evening Star
Ch t courtesy
Chart t off G
Genesis
i FT
39
What would you do?
40
What would you do? – Answer
R2
R1
41
What would you do? – What followed
42