The Complete Guide to Using Candlestick Charting How to Earn High Rates of Return-Safely

The Complete Guide to Using Candlestick Charting How to Earn High Rates of Return-Safely

by Alan Northcott

NOOK Book(eBook)

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The investment world is full of different methods for understanding how to best grow your rates of return and minimize risk. The Candlestick Charting method, first developed by Japanese rice traders in the middle of the 19th century, has become one of the favorite modern methods of analyzing and understanding the market through careful plotting and analysis of the data provided. This book will guide you through the seemingly complex, but revolutionary, useful method of candlestick charting to gain the highest possible rates of return while ensuring your risks are as minimal as possible.

Candlestick charting is a complex language all in itself and for that reason, this book will guide you through the entire process of understanding the language, starting with the very origins of the technique. You will learn how it was developed and why it is still used today, including what changes have been made to the methods by Western investors. You will learn how the candlestick charts are prepared and what the different line constructions signify. Additionally, you will be shown how to read and differentiate between the different bodies, including the short and long white and black bodies, to measure high and low price levels, support, and resistance.

You will be shown the various additional forms such as spinning tops, shadows, and doji. Next, the various different candle lines are outlined in full detail, showing you dozens of different formations including the single candle lines of "the hammer", "the hanging man", and "the shooting star", the dual candle lines of "dark cloud over", "the piercing pattern", "the engulfing pattern", "last engulfing pattern", and "harami". You will also learn the window candle lines, as well as the formations of three or more candle lines. Analysis of candle lines and the technical aspects, including how to discern stops, the risk/reward in each line, trends, the use of computers, and how to place and offset trades will supply you with the necessary information you need to read the candle lines.

By interviewing dozens of experts in the reading and analysis of candle charts, this book is able to provide a comprehensive perspective of candle charts and how you can start using moving averages, analyzing three line break charts, renko charts, and kagi charts. You will be provided with practice charts for all three major types and additional resources to help you learn how to read and analyze each type. For anyone interested in the centuries old Japanese style of market analysis that is candlestick charting, this book provides a comprehensive overview from the very origins to the most modern of interpretations.

Product Details

ISBN-13: 9781601385307
Publisher: Atlantic Publishing Group
Publication date: 07/20/2009
Sold by: Barnes & Noble
Format: NOOK Book
Pages: 288
File size: 3 MB

Table of Contents

Table of Contents 4

Foreword 9

Preface 11

Chapter 1 The History of Candlestick Charting 15

Chapter 2 Introduction to Candlestick Charting 25

Chapter 3 Basic Construction of the Candle Line 31

Chapter 4 Basic Trading Strategies 39

Chapter 5 The Psychology of the Candles 43

The Doji 44

The Spinning Top 46

High Wave Candle 47

The Long Body 48

Chapter 6 Candlestick Patterns - Single-Day Reversal Signals 51

Chapter 7 Candlestick Patterns - Two-Day Reversal Signals 65

Chapter 8 Candlestick Patterns - Three-Day Reversal Signals 93

Chapter 9 Candlestick Patterns - Four-Day Reversal Signals and Beyond 129

Chapter 10 Candlestick Patterns - Two-Day Continuation Signals 145

Chapter 11 Candlestick Patterns - Three-Day Continuation Signals 155

Chapter 12 Candlestick Patterns - Four-Day Continuation Signals and Beyond 165

Chapter 13 Application of Candlestick Charting 173

The Place for Candlesticks 174

The Limitations of Candlesticks 174

The Advantages of Candlesticks 175

Blended Candle 176

Patterns to Watch 178

Chapter 14 Candlestick Confirmations 183

Moving Averages 184

Oscillators 185

Support and Resistance 197

Trendlines 199

Bollinger Bands 201

Volatility 202

Fibonacci 203

The Trading Plan 209

Chapter 15 Trading Psychology 209

Fear and Greed 212

Other Emotions 215

Trading Journal 216

Placing Your Trade 219

Chapter 16 Money Management 219

Trading Funds 223

Approach to Allocation 224

Making Your Picks 226

Figuring Your Stops 228

Sakata's Method 233

Chapter 17 Other Charting Methods 233

Three-Line Break 240

Renko Charts 245

Kagi Charts 248

Candle Volume Charts 253

Appendix A Practice Charts 261

Chartof Lumber Liquidators, Inc 262

Chart of Companhia Parana De Energ 266

Books 269

Appendix B Resources 269

Web sites 271

Appendix C Glossary 273

Author Dedication & Biography 283

Index 285

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