Japanese Candlesticks Language

JAPANESE
CANDLESTICKS
STRATEGIES
TABLE OF CONTENTS Page 00
CHAPTER 1 : FORGET ABOUT WHAT YOU'VE

LEARNED ABOUT JAPANESE CANDLESTICKS
CHAPTER 2 : THE MARKET STRUCTURE
CHAPTER 3 : TRADE ACCUMULATIONS

PHASES ON THE MARKETS
CHAPTER 4 : CANDLESTICKS THAT I USE IN

MY TRADING
CHAPTER 5 : IDENTIFYING TRAPS IN TRADING

WITH JAPANESE CANDLESTICKS
CHAPTER 6 : JAPANESE CANDLESTICKS

CLOSURES IN DAILY
CHAPTER 7 : ENTRIES, SL, TP, RR

CHAPTER 1 Page 01
CHAPTER 1 : FORGET ABOUT WHAT

YOU'VE LEARNED ABOUT JAPANESE
CANDLESTICKS
In trading, if obvious concepts worked, all

traders would win...
When you start trading and even sometimes after

years of experience on the markets, you think you
have to learn all the Japanese candlesticks
configurations to be profitable on the markets.
Well, this is a mistake and a waste of time in your

trading.
Indeed, there are several hundred Japanese

candlesticks configurations and some of them are
even sometimes invented by unknown traders.
In trading, you have to be able to identify concepts

that will make you become profitable on the
markets.
CHAPTER 1 Page 02
Learning all the names of Japanese candlesticks to

the letter is useless…
It is like buying a new object and learning the

instructions from top to bottom. What is the point?
There is clearly no point in this.
However, you must be able to understand Japanese

candlesticks.
There is a slight difference between knowing names

and knowing how to use Japanese candlesticks.
This is what I am going to try to demonstrate through

this e-book and its chapters.
When I started trading a few years ago now, I did the

same thing… I learned the name of each and every
candlestick and used those Japanese candlesticks to
realize their efficiency on the markets.
I realized two things :
95% of the Japanese candlesticks I had learned

do not work because they are not famous
enough.
5% of the Japanese candlesticks are relevant

because they are easily identifiable on the
markets.
CHAPTER 1 Page 03
On the markets, what works is what is easily

identifiable.
Do not forget that markets are psychological. In front

you there are real human beings with emotions just
like you and they all have the same ability to
assimilate information.
A lot of traders think they must reinvent trading by

using their own concepts and by finding
configurations that others do not see.
This is an ego problem that a lot of traders have, they

are just trying to be « unique ».
But on the markets, a trend is created :
1. Because all traders see the same thing.
2. And because they see the same thing, cash flows

are placed on the markets, those cash flows generate
a movement of the price.
CHAPTER 1 Page 04
What works is what is easily identifiable because

the brain assimilates simple information way
faster, this is just a question of logic.
Ultimately, trading is buying low and selling high.
This definition of trading illustrates perfectly the

mentality you have to adopt on the markets to be
profitable.
At this point, you are entitled to question what really

works on the markets. Therefore, you can also
wonder which are the best Japanese candlesticks
configurations.
Well, I will tell you right now. What matters to

determine the efficiency of a Japanese candlestick is:
1. Its form.
2. Its color in some cases, although it is not always

essential.
3. The number of Japanese candlesticks that follow

each other.
I am going to sound repetitive, but Japanese

candlesticks were created to understand traders’
psychology, that’s all.
CHAPTER 1 Page 05
In the past, traders only used line charts and the

order book.
Old trading methods made trading very complex.

This is why the informations were limited.
Today, thanks to the Japanese candlesticks, you have

access to essential informations.
You have to learn how to use those information to

trade intelligently and in a professional way.
From a rational point of view, you are probably

wondering about the legitimacy of those information
that you find on the Japanese candlesticks
sometimes in a free way on the internet.
Do you really think that professional traders learned

how to trade only with free information found on
different search engine?
To be honest, I am sure you know the answer is no.

CHAPTER 1 Page 06
Nowadays, the only way to understand the

psychology on the markets is the psychological
analysis of Japanese candlesticks. This analysis is
used by all the best traders in the world.
You have to reprogram the conscious part of your

brain and unlearn to relearn.
How are you supposed to do that? I will show you

below what is the best reading method to
understand Japanese candlesticks and I will also
show you how to trade like I do.
FUNDAMENTALLY, WHAT IS A JAPANESE

CANDLESTICK MADE OF?
It is necessary to explain the composition of a

Japanese candlestick to understand its point and to
extract the best information as possible.
A lot of traders like you know that a Japanese

candlestick is composed of :
a. A higher high formed by the price

b. A lower low formed by the price
c. An opening price
d. A closure price
CHAPTER 1 Page 07
Whether the Japanese candlestick is a buyer

one or a seller one, you will find those four
information. Just like in the diagram below.
This interpretation of Japanese candlesticks is the

most classical, the most famous and the most used
by traders.
However, this interpretation of Japanese candlesticks

is limited if you only focus on the use of candlesticks
you know thanks to some researches.
We saw here that Japanese candlesticks were

composed of several parts : part a, b, c and d.
CHAPTER 1 Page 08
Every part has an importance from a technical

analysis point of view. Therefore, it is really
important to detail every part to understand the
point.
You have to read Japanese candlesticks as a

marathon performed by traders.
During this marathon, you can find the following

stages in this same order :
1. The beginning of the marathon (the opening of

the Japanese candlestick).
2. The maximum distance travelled (the higher

high).
3. The minimum distance travelled (the lower

low).
4. The end of the marathon (the end of the

Japanese candlesticks).
CHAPTER 1 Page 09
Classic supports and resistances are added here to

support my words and to understand the marathon
metaphor.
Supports and resistances correspond to barriers that
the marathoners did not manage to overcome.
The green arrow corresponds to the beginning of
the marathon : traders enter the market.
The blue arrow corresponds to the maximum

distance travelled by traders : here, it is a failure
and traders came out of the race because the
price closed underneath the resistance line.
The red arrow corresponds to the end of the

marathon : traders come out of the market for
this given period of time.
CHAPTER 1 Page 10
The green arrow corresponds to the beginning of

the marathon : traders enter the market.
The blue arrow corresponds to the maximum

distance travelled by traders : here, it is a failure
and traders came out of the race because the
price closed underneath the support line.
The red arrow corresponds to the end of the

marathon : traders come out of the market for
this given period of time.
CHAPTER 1 Page 11
To conclude on this point and to understand the

logic in terms of technical analysis, what matters
the most on a Japanese candlestick is :
The opening price of the Japanese candlestick.
The distance attempted to be travelled.
The closure price of the Japanese candlestick.
Thanks to the three information mentioned above,

you have a powerful time indicator and you know
the history of the Japanese candlestick in question.
Now, you just have to line the information given by

the Japanese candlesticks on your charts up to draw
conclusions and take rational trading decisions.
Previously, I told you that what also mattered was :
The form of the Japanese candlestick.
Potentially, its color in certain cases.
The number of Japanese candlesticks that follow

each other.
CHAPTER 1 Page 12
Now, Japanese candlesticks will give you time

indicators and instructions to choose your trading
direction.
You need to know that thanks to those information,

you will be able to know when the price
retracement will happen and how far the price will
retrace.
Indeed, the larger the shape of the candlestick

is, the stronger the retracement will be.
In the same way, the higher the number of

candlesticks following each other is, the
stronger the retracement will be.
CHAPTER 1 Page 13
In this example, the price is retracing towards the

38.20% threshold.
It's a downtrend.
The price forms a retracement and then touches

the 0% threshold again.
Force of movement: weak, slight accumulation

of price share.
Wait for price share to build up on the threshold

and a Japanese candlestick pattern to confirm the
fall.
CHAPTER 1 Page 14

50% threshold.
It's a downtrend.

Force of movement: medium, slight

accumulation of price share.

fall.
CHAPTER 1 Page 15

61.80% threshold.
It's a downtrend.

Force of movement: strong, strong accumulation

of price share.

fall.
CHAPTER 1 Page 16

78.60% threshold.
It's a downtrend.

Force of movement: very strong, strong


fall.
CHAPTER 1 Page 17

100% threshold.
It's a downtrend.

Force of movement: maximum, strong


fall.
CHAPTER 1 Page 18

38.20% threshold.
It's an uptrend.

Force of movement: weak, slight accumulation

of price share.

fall.
CHAPTER 1 Page 19

50% threshold.
It's an uptrend.

Force of movement: medium, slight


fall.
CHAPTER 1 Page 20

61.8% threshold.
It's an uptrend.

Force of movement: strong, strong accumulation

of price share.

fall.
CHAPTER 1 Page 21

78.60% threshold.
It's an uptrend.

Force of movement: very strong, strong


fall.
CHAPTER 1 Page 22

100% threshold.
It's an uptrend.

Force of movement: maximum, strong


fall.
CHAPTER 1 Page 23
With some experience in technical analysis and

some practice, you will be able to know to what
level the price runs the risk of retracement with the
help of Japanese candlesticks.
If you want to identify the support zones and

resistance zones that the price risks to reach with
graphics, you can use Fibonacci retracements. They
are really efficient.
The thresholds to consider are the followings :
The 0% threshold
The 38.2% threshold
The 50% threshold
The 61.8% threshold
The 78.6% threshold
The 100% threshold
The other thresholds are not that efficient and do

not offer great probabilities of success.
CHAPTER 1 Page 24
Train yourself to anticipate the reversal of Japanese

candlesticks and notice their reactions on the given
thresholds.
The idea is not to use formally Fibonacci

retracements and candlesticks. A lot of traders do
that, but it is way too simplistic.
In reality, the idea is to understand gravity on the

markets.
Let’s take a new metaphor : the ball one. When you

throw a ball towards the sky, it will come back
towards the ground to bounce.
Depending on the intensity of the movement, the

ball will bounce more or less quickly.
On the markets, it is exactly the same thing.
Indeed, the more the traders rush, the more

important the number of candles will be and the
more powerful the retracement will be, then this
will quickly lead to a fall of the market.
CHAPTER 1 Page 25
What counts on markets are price movements.
Everything that comes after the price is

secondary and only has to be considered
partially.
Always remember this metaphor.

CHAPTER 2 Page 26
CHAPTER 2 : THE MARKET STRUCTURE
In trading, if you do not understand what you

see, it is because you are not trading in the right
place.
Markets are composed of high points and low points,

whether in an uptrend or a downtrend.
High points and low points formed on the market

show investors’ psychology. Therefore, they point out
when :
There is an uptrend on the market.
There is a downtrend on the market.
There is a ranging zone.
Many traders only trace simple trendlines. But this is

a mistake.
CHAPTER 2 Page 27
Trendlines do not show when the price will reverse.
If you want to use Japanese candlesticks effectively

and if you want to use my way of doing it, you have to
associate them with the market structure in order to
get :
High probabilities of success.
Key points of market reversal.
In trading, what allows an important success rate is

the combinaison of the confirmations which will
accentuate this success rate on an asset.
As a trader, you want to become an expert in :
Japanese candlesticks comprehension : that

means in traders’ psychology.
The analysis of the different stages of impulsions

and retracements.
CHAPTER 2 Page 28
As a result, you will be able to identify important

thresholds on which you will buy or sell on the
market.
I already mentioned it, but technical analysis has

changed a lot. That is why all the modern elements
of technical analysis will allow you to take decisions
way easily than before.
Nowadays, it is inconceivable for you and me to trade

with line charts for example.
In this chapter, I am going to show you how to

cleverly identify the market structure of an asset to
confirm your decisions with some effective Japanese
candlesticks.
I use the word « cleverly » because you may make

mistakes in some cases due to a fake market
structure.
CHAPTER 2 Page 29
You have to be selective on markets because you

cannot trade everything at any time.
Traders with dozens of peers on their watchlists

fell into the trap of « the trader's ego ». They think
they can trade everything because they are good
at technical analysis. That’s wrong.
Some movements are not symmetrical. Therefore,

they don’t give good probabilities of success.
The clearer the movement on the market is, the

higher the probability of success will be.
Once more, for the most of them, the traders you

face are human beings. Therefore, if trader A sees a
clear movement, logically trader B will see it too.
If all traders see the same thing, that’s enough to

create a new impulsion movement.
CHAPTER 2 Page 30
In theory, an uptrend structure is composed of :
High points increasingly high.

Low points increasingly high.
A downtrend structure is composed of :
Low points more and more low.

High points more and more low.
A consolidation zone is composed of :
High points at the same level.

Low points at the same level.
A structure is identified by observing its recent points.

And this is thanks to those identified elements that is
is possible to trade.
An uptrend structure is broken when :
The last low point breaks and is retested by the

price.
A downtrend structure is broken when :
The last high point breaks and is retested by the

price.
CHAPTER 2 Page 31
Here is a valid bullish structure.
To validate a bullish structure the price must form:
Higher and higher high points.
Higher and higher low points.
Use pivot points if you want to identify them faster.

CHAPTER 2 Page 32
Here is a valid bearish structure.
To validate a bearish structure the price must form:
High points lower and lower.
Low points lower and lower.

CHAPTER 2 Page 33
I already told you that all the market structures were

not optimal to trade.
Indeed, as a trader you must favor quality over

quantity.
It is not because you have the possibility to have the

flow of an asset that it is the right asset to trade.
You can have preferences when you trade and when

you specialize yourself on one ou several assets, but
you have to know if it is the right time to trade on it
or not.
Sometimes, impulsions and retracements are clear.

But sometimes, the price has a behavior that does
not allow trading for the following reasons :
A lack of volatility : that means a low impulsions

in the movements.
A fundamental event : that means a new

economic that makes the market tip over.
Low gaps between supports and resistances.

Therefore, the market is in a period of
consolidation and does not allow to choose a
direction to buy or sell.
CHAPTER 2 Page 34
This is a bearish structure here, but it is not a valid

move.
This move is not valid and you should avoid trading

on it because :
The price has not yet traced
There are no clear waves in this market
The price forms a double bottom, the next

retracement will therefore be invalidated
CHAPTER 2 Page 35

move.

on it because :
Japanese candlesticks give too much divergent

information so false signals
CHAPTER 2 Page 36

move.

on it because :
The price forms an accumulation, the risk of

entering here is to enter the retracement. Your
stop loss will therefore be touched and then the
price will start again in the desired direction
CHAPTER 2 Page 37

move.

on it because :
The movement is confusing, we are both in a

downtrend but also in a potential uptrend. You
must wait here for a break + a retest to make a
rational decision
CHAPTER 2 Page 38

move.

on it because :
Japanese candlesticks give divergent

information and are too tight, they cannot
identify a clear retracement
CHAPTER 2 Page 39
Now you understand, it is useless to trade on

everything.
You have to learn to be selective just as you are able

to do it in the real life.
You really must banish those kinds of charts from

your watchlists because price retracements will not
be important.
Previously, I talked to you about the form and the

number of candlesticks on a market.
Know that if the price structure is not optimal,

Japanese candlesticks will lose their efficiency.
Japanese candlesticks only are effective if the market

structure is clear and allows to take decisions rapidly.
Now, I am going to show you configurations charts

that I personally favor to use Japanese candlesticks at
best and to anticipate the best price reversals.
That is to say the price retracements that will allow

me to increase the size of my aims on my trades.
CHAPTER 2 Page 40
Here is a clear bearish pattern.
You may want to consider trading this pair because:
The high points and low points formed by the

price are easily identifiable
The price respects the oblique trend
The low is broken point a retest is now necessary

to sell
CHAPTER 2 Page 41
Here is a clear bearish pattern.
The old bullish structure has been invalidated

A retest is in progress, we now need a Japanese

candlestick cofiguration to confirm the fall
CHAPTER 2 Page 42
Here is a clear bullish pattern.

High point breakout and retest are required to

buy
CHAPTER 2 Page 43
Here is a clear bullish pattern.
The old bearish structure has been invalidated
The structure is easily identifiable
A retest is in progress, we now need a Japanese

candlestick cofiguration to confirm the rise
CHAPTER 2 Page 44
Generally, you should be trading in a market that you

understand and that is clear.
Becoming a trader is also knowing how to

assimilate information and be selective.
I myself do not trade in certain markets because the

structure is incomprehensible and Japanese
candlesticks give me too much divergent
information.
Learn how to be selective and don't feel guilty if you

have to trade another pair.
Tell yourself again that if this is not clear to you, it is

surely the case for other traders, so the principle of
self-realization will be totally distorted and your trade
has a high probability of being a losing trade.
Exception trades are only found on market structures

that are clear and easily identifiable.
CHAPTER 3 Page 45
CHAPTER 3 : TRADE ACCUMULATIONS

PHASES ON THE MARKETS
The market never goes up in a straight line, it

always retraces...
In this chapter, I am going to talk about the notion of

price accumulation on the markets.
It is notion that not much traders use in their trading

strategies because this notion is most of time used
by professionals.
90% of my entries are based on a price

accumulation.
What is a price accumulation?
A price accumulation is when the market evolves

in a given direction without retracing.
To make it simple, that is when you only have

impulsions phases and no retracements phases.
However, you know that the markets do not evolve in

a straight line.
CHAPTER 3 Page 46
Therefore, at some point the market will certainly

retrace to leave in a given direction.
It is the stairs theory.
You have an impulsion, a retracement, an impulsion,

a retracement and so on.
Most of the time, inexperienced traders enter on the

impulsion phase and ignore the retracement to
come.
That is, they enter on the trade at the wrong time

because the market will turn over on them.
We have to wait for this reversal to enter the trade

when everyone is out of the market.
Tell yourself in a childish way that when the market

goes up too much, it has to retrace ; when the
market goes down too much, it has to retrace.
CHAPTER 3 Page 47
Believe me, by applying this simple concept in

theory, you will graciously increase your success rate
because you will respect the following concept : buy
high and sell high.
Show intelligence and don’t be part of naive people

who think that what is accessible for everyone is a
fatality on the markets.
What is obvious on the markets does not always

work.
The idea is to copy the techniques of professionals to

enter your trades at the right time.
On the markets, there are two categories of traders :
Retails traders : they are individual traders, just

like you and me.
Market makers : they are professional traders, we

call them market makers because they have the
ability to move markets as they wish thanks to
their liquidity.
CHAPTER 3 Page 48
Stop acting like non-informed traders and act like

market markers.
You must identify the moment when most traders

get out of the markets, wait for them to get caught
and only after that enter the trade to take advantage
of the big impulsion.
Most of the time, I have almost no drawdowns on my

trade or only a few.
That is, when I enter a trade, I am directly executed

and either the market goes my way, either I exit the
trade before it turns over against me.
It is by taking advantage of the accumulation phases

that this principle becomes possible.
1. Retails traders are being chased from the market.
2. Market makers enter the market and benefit

from their liquidity.
CHAPTER 3 Page 49
As you understand, you must be in the second

category.
If you enter classically like most traders do on simple

supports and resistances, you will be part of the first
category.
How many of you have already tried to sell on a

resistance and buy on a support? Many, I guess.
And what happens? It partially works. Sometimes the

market rules in your favor, sometimes it doesn’t.
The idea is to arrive at a high level of certainty.

Therefore, do not follow the majority.
CHAPTER 3 Page 50
This is a bullish accumulation here because:
Price closed above the S&D zone
The following candlesticks are of the same color,

they are buying candlesticks
The price still hasn't traced
Following the rejection candle, the price drops

and retraces as agreed
CHAPTER 3 Page 51
The following candlesticks are of the same color
The price still has not retraced
Following 2 rejection candles, the price drops as

agreed below 0% and forms a new trend
CHAPTER 3 Page 52
Same thing here :
Following 2 rejection candles, the price drops as

agreed below 0% and forms a new trend
CHAPTER 3 Page 53
Following the rejection candle and the bearish

swallowing candle, the price falls and retraces as
agreed
CHAPTER 3 Page 54
Same thing here :
Following the rejection candle, the price drops

and retraces as agreed
CHAPTER 3 Page 55
This is a bearish accumulation here because:
Price closed below the S&D zone

they are selling candlesticks
Following the rejection candle, the price rises and

retraces as agreed and then starts falling again
CHAPTER 3 Page 56

Following the rejection candles, the price rises

and retraces as agreed and exceeds the threshold
of 0%
CHAPTER 3 Page 57

retraces as agreed
CHAPTER 3 Page 58
Overshoot of 0% after bullish swallowing candle

CHAPTER 3 Page 59
Same thing here :


retraces as agreed and exceeds the 0% threshold
CHAPTER 4 Page 60
CHAPTER 4 : CANDLESTICKS THAT I

USE IN MY TRADING
The best Japanese candlesticks to finally win on

the markets.
I am now going to show Japanese candlesticks that I

personally use in my trading to take decisions on the
markets.
You will see that in the end, it is not very useful to
learn all the candlesticks names to make your ego
grow and to feel intelligent.
Intelligence lies in the way you will use the
information.
As I said, what is easily recognizable works. However,
what is too obvious is often a trap.
You have to find a balance between those two
notions, and find out how you will use information in
your trading.
Japanese candlesticks I personally use are
formidable if you use them on precise time frames.
The larger the time frame is, the stronger the
confirmation is.
CHAPTER 4 Page 61
First configuration: bullish engulfing.
The bullish engulfing is composed as follows:
A red candle with a body taller than its shadows
A green candle that closes above this red candle
This setup is a bullish reversal setup as buyers return

to the market.
CHAPTER 4 Page 62
Second configuration: bearish engulfing.
The bearish engulfing is composed as follows:
A green candle with a body larger than its

shadows
A red candle that closes below this red candle
This setup is a bearish reversal setup as sellers re-

enter the market.
CHAPTER 4 Page 63
Third configuration: the candle rejection.
The candle rejection is composed as follows:
A red or green candle with a body smaller than its

shadows. The color of the candle is not important,
what matters is the size of the shadows which
must be at least twice the size of the body.
This setup is a bullish or bearish reversal pattern, it

depends on the S&D area.
CHAPTER 4 Page 64
Fourth configuration: bullish accumulation.
The bullish accumulation is composed as follows:
Several buying candles follow one another

without retracing.
This setup is a bearish reversal pattern as the price

needs to retrace at some point.
Use Fibonacci as I showed you to anticipate the

threshold, this configuration is formidable.
CHAPTER 4 Page 65
Last configuration: bearish accumulation.
Bearish accumulation is composed as follows:
Several selling candles follow one another

without retracing.
This setup is a bullish reversal setup as the price

needs to retrace at some point.
Also: use Fibonacci as I showed you to anticipate the

threshold.
CHAPTER 4 Page 66
I only use candlesticks that I have just presented to

you in my strategy for several years now because they
respect my rules :
They are easily recognizable.
They express the psychology of traders : we

recognize the phases of accumulations and losses
of impetus thanks to the bodies and shadows.
Train yourself to identify the configurations I have just

presented and you will realize how effective they are
on the markets.
There is no Holy-Grail, you need to be able to

interpret the signals at the right time and to put
yourself in the shoes of other traders to understand
their mindset.
Remember that in front of you, other traders are for

most of them human beings.
CHAPTER 4 Page 67
So they have a brain that is composed of a conscious

part and an unconscious part.
It is the two parts of the brain that will facilitate the

decision-making process on the markets.
CHAPTER 5 Page 68
CHAPTER 5 : IDENTIFYING TRAPS IN

TRADING WITH JAPANESE
CANDLESTICKS
When you know where 95% of traders are being

tricked, you join the 5% of winning traders...
Now that you know my choices in terms of Japanese

candlesticks, you need to add additional technical
analysis to favor the market decision-making process.
Thanks to Japanese candlesticks, we now know how

to enter a trade in an ideal way and how most
traders are driven out of the markets.
We will now add other elements to increase our

certainty in a market.
I use supply and demands zones to anticipate

market reversals.
However, I use those zones differently than most

traders.
CHAPTER 5 Page 69
Most traders will use S&D zones as traditional

supports and resistances. They will buy and sell on
those S&D zones and once again it will partially work.
The most rational way to trade with Japanese

candlesticks and S&D zones is therefore to wait for a
closure price either :
Above a S&D zone.
Below a S&D zone.
Here again, you respect the principle of buying low

and selling high. You increase your success rate here
and you decrease the probability of being driven out
of the market.
Before taking a trade, whether the trade is buyer or

seller, be aware of the probability of being driven out
by price.
CHAPTER 5 Page 70
Somehow, you’re going to enter a trade later than

the other novice traders, but you’re going to finally
come back at the right time.
1: Wait until inexperienced traders are driven out.
2: Enter the trade.
3: Repeat this process to infinity.
Remember, it is not by following the majorities that

you join the peloton at the head of the race.
CHAPTER 5 Page 71
In this example it is a fakeout because:
Price closed above the area without retracing,

price never goes up in direct line
Many buyers will get trapped on this false

breakout
The shadow of the candle shows pressure from

sellers, a turnaround was to be expected
CHAPTER 5 Page 72

Many buyers will be trapped on this false

breakout
Bearish swallow candle shows sellers return to

market, price must turn around and fall
CHAPTER 5 Page 73

Many buyers will be trapped on this false

breakout
The price forms an accumulation and you see it

the reaction with the red candle is then drastic
and causes the market to fall.
CHAPTER 5 Page 74
Price closed below zone without retracing, price

never drops in direct line
Many sellers will get trapped on this false

breakout
The rejection candle shows us a market reversal

and the market then goes up towards the 0%
threshold
CHAPTER 5 Page 75
Same thing here :
Price closed below zone without retracing, price

never drops in direct line
Many sellers will get trapped on this false

breakout
The rejection candle shows us a market reversal

and the market then goes up towards the 0%
threshold
CHAPTER 6 Page 76
CHAPTER 6 : JAPANESE CANDLESTICKS

CLOSURES IN DAILY
The daily time frame is your guide...
I quickly introduced the following notion in the

previous chapters: the bigger the time frame is, the
stronger the confirmation will be.
You need to consider this concept and apply it in

your trading to increase your success rate
You know now that on the markets, it is traders

retails against market makers.
Be aware that markets makers prefer large time

frames because they are more efficient.
Indeed, I talked about market structures.
On large time frames, the market structures are

much more visible, so it is more obvious to anticipate
a reversal of the price and therefore to take
advantage of the new impulsion phase.
CHAPTER 6 Page 77
That is why I always start my technical analysis

from the daily time frame.
In this way, it will be much more obvious for you to

anticipate the next phase of impulse of your asset.
And therefore to take advantage of it.
You will use the following concepts to confirm your

trades :
Market structures.
S&D zones.
Accumulation phases.
Confirmations with Japanese candlesticks.
Moreover, I am going to share with you a concept

that only a few people know about : the importance
of key days.
CHAPTER 6 Page 78
Did you know that Japanese candlesticks closures on

the daily time unit make sense?
Indeed, some days are key days that you need to

know.
That is to say, when candlesticks closures of those key

days comes, you will be able to anticipate a
movement of the price.
You will never find this concept elsewhere, we are

very little to use it.
What are the days you need to favor?
The idea is to trade in the direction of the trend.

Classic you will tell me…
However, you should know that with my trading

approach we will enter most of the time at the
beginning of the week: that is either Monday,
Tuesday or Wednesday.
Why? Simply because people are looking to be flat on

weekends for most of them.
CHAPTER 6 Page 79
That is, they are looking to take their profits and close
their trades on the weekend.
Don’t you see what I want to say here? It’s very

simple. You have two key days to respect :
Monday’s candlesticks closure.
Friday’s candlesticks closure.
Monday corresponds to the minimum, Friday

corresponds to the maximum.
Indeed, markets open on Monday and close on

Friday.
The point of following those two days is to know the

future trend.
Most of the time, I am capable of predicting the

trend of the coming week because the candle
closure from Friday is giving me an information.
It must be confirmed by Monday’s candle closure to

define the direction of the week.
CHAPTER 6 Page 80
In trading, sessions are often mentioned and it is

essential not to neglect those sessions. But you also
have to keep an eye on those key days I told you
about because they define the direction of the
market.
Remember, Japanese candlesticks are psychological

so if you have bullish information on Friday then
Monday, the trend of the week will be bullish.
Conversely, if you have information on Friday and

then Monday, the trend of the week will be bearish.
This is not a fatality, but very often you will be able to

identify the trend of the week with this additional
confirmation that you need to add to your trading
plan.
CHAPTER 6 Page 81
In this example:
Friday candle is a big seller
The price hit the S&D area
Monday's candle shows us a big pressure from

buyers with this shadow that rejected the S&D
zone, so a reversal is to be expected
CHAPTER 6 Page 82
Following this rejection candle coming from the key

day Monday, the price goes up as agreed by more
than 100 pips very quickly.
This kind of movement is predictable thanks to the

key days I mentioned to you. They correspond to
psychological days for traders: start and end of week.
The price goes up and moves towards the area

upwards.
CHAPTER 6 Page 83
In this example:
Friday's candle is a rejection candle
The price hit the S&D area
Monday's candle shows us a return of sellers and

forms a bearish engulfing which announces a fall
in the market
CHAPTER 6 Page 84
Following the candle on Friday and Monday, the

price drops very quickly downwards and forms a
breakout of the first zone.
Here too is a move of several hundred pips

predictable using key days and Japanese
candlesticks.
Following the breakout of the first zone, the price

must therefore move towards a second lower zone
before retracing again.
CHAPTER 6 Page 85
We have the same scenario on the same pair:
The price traces as agreed
Once S&D zone hits Friday candle shows buy-out

of buyers
Monday's candle confirms the decline it is a

bearish engulfing candle so a sharp fall is to be
expected once again thanks to the key days
CHAPTER 7 Page 86
CHAPTER 7 : ENTRIES, SL, TP, RR
Trade successfully.
I demonstrated through the previous chapters my

own trading approach. Moreover, I showed you how
to efficiently understand Japanese candlesticks in
your trading.
Now, I am going to explain step by step how to enter

a trade by lining up all the elements I taught you.
It is important for all those elements to be correlated

to increase even more your success rate and favor
probabilities.
In trading, the word probabilities is used because no

one can guarantee the outcome of the technical
analysis.
You have to understand that trading is an art and not

an exact science. That is why you have to treat your
activity that way.
CHAPTER 7 Page 87
All the elements I presented will favor your success

rate and will allow you to increase your capital
exponentially. But for that, you need to respect all of
those elements.
The respect of your rules is the key to your success.

CHAPTER 7 Page 88
On AUDCAD:
The structure is bearish as the price has recently

formed a final low point lower and lower
Once the S&D zone hits the candle Friday shows a

buyout of buyers, it's a rejection candle
From this moment, we switch to the H1 to refine

our stoploss and increase our risk to reward
CHAPTER 7 Page 89
Once in H1:
The price is close to the S&D area
The price forms an asymmetric shoulder head

shoulder, which gives us an additional element on
this technical analysis
The lowest of this structure has been broken (blue

line) and the price forms a retest close to the area
and a rejection candle
We enter, we place a stop and the target on the

area
CHAPTER 7 Page 90
The price falls as expected towards the zone, it is a

full target.
This trade was correct because:
All configurations were present
The risk to reward is 1: 5.61 (you need at least 1: 3 to

validate the entry)
The price continued to form higher and lower

points more and more low
CHAPTER 7 Page 91
On EURUSD:

Once the S&D zone hits the candle shows a

potential false breakout and also a strong
accumulation of the price share

CHAPTER 7 Page 92
Once in H1:
The price is close to the S&D area
The price forms a shoulder head shoulder
The lowest of this structure has been broken and

the price forms a retest close to the zone and a
rejection candle (red rectangle)
We enter, we place a stop and the target on the

area
CHAPTER 7 Page 93
The price falls as expected towards the zone, it is a

full target.
On this trade the risk to reward is also greater than 1:

3 so the trade is valid.
If you decide to let the rest of the position run

towards a second zone, always take a portion of your
profit (at least 50% on the first zone).
The price can turn around, nothing is certain in the

markets.
CHAPTER 7 Page 94
On AUDNZD, same scenario:

Once the S&D zone hits the candle shows a

potential false breakout and also a strong
accumulation of the price share

CHAPTER 7 Page 95
Once in H1:
The price formed an accumulation
The price formed an engulfing candle
Here it is an aggressive entry, you can enter the

trade without retesting however the risk to
reward must be equal to or greater than 1: 5
This kind of setup works great, but you should always

prioritize retests. Here we enter on the impulse of the
market.
CHAPTER 7 Page 97
Through those illustrations, you can precisely identify

the importance of Japanese candlesticks.
The interpretation that we make of it is personal but

you have to be able to understand the others traders’
psychology.
In trading, the self-realization principle determines

the outcome of a technical analysis, even though it is
once more about probabilities.
However, note that if trader A sees the same thing as

trader B, then the success rate of the technical
analysis will increase significantly.
Moreover, you have to learn how to be selective. You

probably know the adage « quality over quantity ».
Modestly, I think it totally corresponds to my trading
approach.
If I had to use a metaphor to describe my approach I

would say that I am more like a sharpshooter than a
solder directly at the front.
CHAPTER 7 Page 98
That means that I wait until my trade confirmations

are lined up to finally fire with my weapon and enter
a trade.
This metaphor is also yours now.
Do not do what other traders do, those who are at

the front. Those ones rush headlong without even
looking where they are going just to satisfy their
cupidity and their urges.
In trading, greedy traders will never have a high life

expectancy. The best traders are the meticulous ones
and they considered their capital as their work tool.
Therefore, if you damage your work tool, you will not

be able to work anymore.
Give a grade to your trades. If you cannot give a 10/10

to your trades, do not enter this trade. It is as simply
as that.
Look at the others trade on anything and everything

and remember you were just like them and that you
changed because you learned how to be selective.
Dear trader friends, welcome to the zone...

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JAPANESE

CHAPTER 1 : FORGET ABOUT WHAT YOU'VE

CHAPTER 2 : THE MARKET STRUCTURE

CHAPTER 3 : TRADE ACCUMULATIONS

CHAPTER 4 : CANDLESTICKS THAT I USE IN

CHAPTER 5 : IDENTIFYING TRAPS IN TRADING

CHAPTER 6 : JAPANESE CANDLESTICKS

CHAPTER 7 : ENTRIES, SL, TP, RR

CHAPTER 1 : FORGET ABOUT WHAT

In trading, if obvious concepts worked, all

When you start trading and even sometimes after

Well, this is a mistake and a waste of time in your

Indeed, there are several hundred Japanese

In trading, you have to be able to identify concepts

Learning all the names of Japanese candlesticks to

It is like buying a new object and learning the

However, you must be able to understand Japanese

There is a slight difference between knowing names

This is what I am going to try to demonstrate through

When I started trading a few years ago now, I did the

I realized two things :

95% of the Japanese candlesticks I had learned

5% of the Japanese candlesticks are relevant

On the markets, what works is what is easily

Do not forget that markets are psychological. In front

A lot of traders think they must reinvent trading by

This is an ego problem that a lot of traders have, they

But on the markets, a trend is created :

1. Because all traders see the same thing.

2. And because they see the same thing, cash flows

What works is what is easily identifiable because

Ultimately, trading is buying low and selling high.

This definition of trading illustrates perfectly the

At this point, you are entitled to question what really

Well, I will tell you right now. What matters to

2. Its color in some cases, although it is not always

3. The number of Japanese candlesticks that follow

I am going to sound repetitive, but Japanese

In the past, traders only used line charts and the

Old trading methods made trading very complex.

Today, thanks to the Japanese candlesticks, you have

You have to learn how to use those information to

From a rational point of view, you are probably

Do you really think that professional traders learned

To be honest, I am sure you know the answer is no.

Nowadays, the only way to understand the

You have to reprogram the conscious part of your

How are you supposed to do that? I will show you

FUNDAMENTALLY, WHAT IS A JAPANESE

It is necessary to explain the composition of a

A lot of traders like you know that a Japanese

a. A higher high formed by the price

Whether the Japanese candlestick is a buyer

This interpretation of Japanese candlesticks is the

However, this interpretation of Japanese candlesticks

We saw here that Japanese candlesticks were

Every part has an importance from a technical

You have to read Japanese candlesticks as a

During this marathon, you can find the following

1. The beginning of the marathon (the opening of

2. The maximum distance travelled (the higher

3. The minimum distance travelled (the lower

4. The end of the marathon (the end of the