candlesticks

[Halfbutt]

Hi all, some of you may remember me from a year ago. And yes im still a beginner ! as i completely left it alone after i proved to myself that after having 42 successful trades , the 7 unsuccessful ones were more damaging ,but luckily i still had the sense to trade in low stakes. So theres my confession for the day
But ive been drawn back and may start to trade again but not yet :!:

Can anyone give me an insight into candlesticks and their significance. I was talking to a chap a while ago and he was describing all of their meanings and im wondering if one of more worldly wise of you could start a thread.

many thanks

Colin

 

[a320]

I would highly recommend you get a copy of Nison's work....

Yes I'm biased, but I still think its a must for your core understanding of the subject...

http://www.amazon.co.uk/exec/obidos...154/ref=sr_8_xs_ap_i1_xgl/026-4189168-2186061

http://books.global-investor.com/bo...0&identifier=095b7c9b06919d86c017b58e46c959ed

 

[theknifemac]

I would highly recommend you get a copy of Nison's work....

Yes I'm biased, but I still think its a must for your core understanding of the subject...

http://www.amazon.co.uk/exec/obidos...154/ref=sr_8_xs_ap_i1_xgl/026-4189168-2186061

http://books.global-investor.com/bo...0&identifier=095b7c9b06919d86c017b58e46c959ed

I also recommend the Nison book, but he has a newer Candlestick book than the one above, not sure which is better, maybe someone who has read both can comment ?

http://www.amazon.co.uk/exec/obidos...2481/sr=1-2/ref=sr_1_10_2/202-5084248-9650227

Stew

 

[Faris]

Hello Everyone

The latest book by Nison: New Japanese charting techniques Revealed has in depth information about charting techniques such as Renko, Kagi and three-point charts.
If you have not read his original book, it should not be a problem since he has summarised most of the contents from his previous masterpiece and included into his latest book.

Faris..

 

[TheBramble]

I've read both and I'd like to support Faris' comment that the first book is neatly summarised in the second, but unless you're into Renko, Kagi, 3 Line Break etc. the second will not be as interesting a read.

If you want a really quick run at Candlesticks and don't want to pay the hardcover prices, I also recommend "The Candlestick Course" by Nison (ISBN 0-471-22728-5) from Wiley Trading. This is an excellent little book and actually does a better job as it includes exercises (as you might expect from the title) for you to test your knowledge as you go along.

 

[JTrader]

http://www.stockcharts.com/education/ChartAnalysis/candlesticks.html provides a good starting point.

 

[Halfbutt]

thanks guys.
Im always one for a quick fix, so can anyone use this thread as a quick muppets guide in the same way FTSE beater has done on trends etc. Can anyone pass on the basics in the same way.

thanks and great to see the site has increased its memebers.

 

[theknifemac]

thanks guys.
Im always one for a quick fix, so can anyone use this thread as a quick muppets guide in the same way FTSE beater has done on trends etc. Can anyone pass on the basics in the same way.

thanks and great to see the site has increased its memebers.

Halfbutt

Checkout the Litwick site for diagrams of the common candlestick patterns:

http://www.litwick.com/indicators/bullish.html
http://www.litwick.com/indicators/bearish.html

HTH

Stew

 

[Halfbutt]

thanks guys

 

[barjon]

halfbutt

Be wary of using single candlesticks in isolation - most need confirmation. Similarly, be wary when reversal patterns occur away from expected areas (support, resistance etc).

For me, shooting star and hammer type candlesticks have proved best, particularly (but not necessarily) when associated with high volume. I've marked them in on the not too carefully selected chart

good trading

jon

 

[Second income trader]

Is there much in the way of evidence supporting the use of candlestick analysis? l don't see it mentioned as often as many of the other TA techniques, but then again much of these seem to be more relating to day trading, where perhaps candlesticks are more suitable for swing trading? Comments welcome!

 

[LION63]

Candlesticks are best used by day traders or those that have very short time horizons. Those that use them successfully swear by them based on the fact that they give one a 'feel for the market'. The reason it does not get much of a mention is it's simplicity (and let us be honest, it does not sound tantalising either).

 

[barjon]

candles give a good visual representation of the price action over any time period (I seem to recall from a T2W poll that most people use them) but, for candlestick analysis, I think it works best during a formal trading period where there is an opening and closing of trading books. That's primarily a day then, to a much lesser extent, a week and a month.

there are commercial programmes which recognise various patterns in the way gammajammer suggests but I think the programming is fairly complex unless you are confining to very few patterns. I would see the major problem being judgement interpretation. ie: when is a hammer not a hammer - it may be just hammer-like but still lend itself to the same analytical interpretation.

as for being tantalising, the terminology (hanging man, hammer, morning and evening stars, dark cloud cover, harami, doji etc) does give it a certain je ne sais quois.