Advance Cabdlesticks Pattern

SteveNisonsCandlesticksReIgnited: AdvancedCandlestickstoBoostConfidenceandSuccess
Founder and President: Candlecharts.com
Candlestick Charting Techniques
Steve Nisons
Western Charting Tools
Trading Triad Success System
TradeManagement
www.candlecharts.com
If you want to see farther, you have to go higher
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Candlestick Charts
Quicklyreadthe markets k message SafetyFirstTrading Earlyreversals
Reading the Markets Message Quickly and Accurately
Looksgood
Bear Sterns collapse
Looksgood?
Looksgood?
Reading the Psychology of the market

Thinkthe$hadtroubleinthisarea? Bearshadows,eveningstar,bearish engulfingpatterns, shootingstar..
Negative Selection
Good buy?
Whatisoneofthebestwaystomakemoney?
Those poor traders who got fooled into buying here.
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Owning the Knowledge

Let see what the candles tell us about supply/demand When prices get down near $62.00-61.50?
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Owning the Knowledge
Buying at hammer near $62.00 Target near $63.70 (resistance)
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Getintoanew trendbeforeother tradersseeit
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Bear Stearns Collapse
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Combinations of bullish and bearish candle lines indicate the direction of the market and investors psychological conflicts at important turning points.
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Itiseasytoseewhois incontrolhere
Howaboutnowwiththese spinningtops?
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Candles reveal twice the information as a bar chart
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Candles help us read the markets message
Whatdotheseriesofbullish shadowstell usaboutsupply/demand near63.50? Isitanysurprisewhathappened afew weekslateratthatlevel?
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Quickly see The Mode of the Market
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What candles do and dont do
Whathappen eachtimethis getsnear$43?
Candles or anytechnical systemcant forecast surprises
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INTRODUCING STEVE NISONS 360 CANDLE ANALYSIS

New Strictcriteria ofacandlesignal New Nison Insights New Candlesas support/resistance
New Pattern inFXand nonFX
New Price confirmationofa candlesignal
New Momentum tradingwithcandles
New Detailedpsychology behindeachsignal 22
WWW.CANDLECHARTS.COM
BASICCRITERIA
Open and close the same (or within a few cents or pips) Market trending up or down Also called a cross Doji in a rally called Northern doji Doji in a decline called Southern doji A time to wait without a position in the market
PATTERNPSYCHOLOGY
For a sustainable rally, market has to be pushed up - a doji shows the bullish momentum has now been curbed. The bulls now become concerned with this lack of sustained strength. Markets can sink of their own weight (i.e. dont need sellers to pull markets lower- lack of buyers will do that) a doji hints buyers are now starting to absorb supply. The market is at a delicate turning period and could go either way.
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If early in uptrends/downtrends, or middle of a box range, doji is not important
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Doji and Prior Move
Is the market overextended at these doji?
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This doji is showing a shift in psychology since it comes during a rally
Is this doji telling us there is something different about the market?

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Doji in a Box Range
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If early in uptrends/downtrends, or middle of a box range doji not important Spinning tops and doji could be just a pause to a continuing trend
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The pause that refreshes?
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If early in uptrends/downtrends, or middle of a box range doji not important Spinning tops and doji could be just a pause to a continuing trend Doji generally work better at calling tops than bottoms.
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If early in uptrends/downtrends, or middle of a box range doji not important Spinning tops and doji could be just a pause to a continuing trend Doji generally work better at calling tops than bottoms. Analyze shadows. Interpretation will differ on the type of upper and lower shadows shadows.
Center Doji = Equal length shadows
Most classic doji where bulls and bears are in balance
Upper Shadow Doji:

Unsustainable buying strength
Lower Shadow Doji:

Some buying strength left in the market
Source: Kabushiki Keisen no Mikata Tsukaikata Toshika No Tame No Senryakuzu- Kichitaro Kisamori
Confirmation is important since market at tipping point.

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Depending on the type of movement on the next day, one can get completely different readings readings
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Confirmation
TwoKindsofConfirmation
East+West PriceConfirmation
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East + West Confirmation
Whereacandle signal g confirmsa Westerntechnical signal
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Price Confirmation
Usingamoveaftertheinitialcandlesignaltovalidatesignal
Canbeaclose(oropen)above(forbull candlesignal)orbelow(forbearcandle signal)thecloseofcandlesignal. LessimportanttohaveEast/West confirmation Lessimportantformomentumtrades Themoreidealthecandlepattern,the lessimportantthecandleconfirmation
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Candles and Price Confirmation
Plusofpriceconfirmation: Improveoddsofhammerworking, But
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Price Confirmation Cautions
Considerbuy/sellstoplimits Rememberrisk/reward! Dependsonyourtradingstyle Higherprobabilityatcostof profitpotential
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Price confirmation cautions

Considerbuy/sellstoplimits Rememberrisk/reward! Dependsonyourtradingstyle Higherprobabilityatcostof profitpotential
Confirmed Hammer
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Which of these two scenarios is more important to have bearish price confirmation of the doji?
Note: this will not happen in FX
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Doji and Price Confirmation
New high close and bull shadow. Bear confirmation thus more important
confirmed
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Because a doji or a spinning top in FX will be near the prior session close, you may want to wait for bear confirmation
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Forex doji and Price Confirmation
confirmed
Whywouldyounotbetoo nervousonthisdoji?
44A
Doji but also a new high close
3 2 1
confirmed
Whataboutthisdoji?
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Which of these two scenarios is more important to have bearish price confirmation of the doji?
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Doji and Shadows

Equal shadows
B ll shadow h d Bull
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Criteria: Use the highest high of those two sessions (top of upper shadow) as resistance Implication: Close over that area: market is refreshed. That is when we consider the bull momentum trade
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Doji and Momentum

Doji as resistance
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Doji and momentum trading
Market refreshed
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Doji and momentum trading
Dojiconfirming resistance
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Reviewofcandlebenefits Whatcandlesdontdo Ad an eddojitactics Advanced ta ti sandconcepts on epts Priceconfirmation
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Long Lower (Bullish) Shadows
Although this market is descending, the long lower shadows offsets some of the negative outlook
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MoreBullish 1 2
LessBullish/Bear
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VeryStrongSessions
StrongSessions
NeutralSessions
BearishSessions
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MoreBullish 1 2
LessBullish/Bear
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VeryStrongSessions
StrongSessions
NeutralSessions
BearishSessions Nison Notes
#
1
Name
Tall white double crew cut
Characteristics
No shadows
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MoreBullish 1 2
LessBullish/Bear
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VeryStrongSessions
StrongSessions
NeutralSessions
#
2
Name
Tall white closing crew cut
Characteristics
Small lower shadow
Lower shadow shows market can break under opening price
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MoreBullish 1 2
LessBullish/Bear
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VeryStrongSessions
StrongSessions
NeutralSessions
BearishSessions
#
3
Name
Power line (hammer)
Characteristics
Shadow 2x or more real body. Can have very small upper shadow.
Nison Notes
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MoreBullish 1 2
LessBullish/Bear
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VeryStrongSessions
StrongSessions
NeutralSessions
#
4
Name
Tall White
Characteristics
Upper shadow 25% or less real body
Upper shadow shows some rejection at higher prices
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MoreBullish 1 2
LessBullish/Bear
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VeryStrongSessions
StrongSessions
NeutralSessions
#
5
Name
Small white with bull shadow
Characteristics
Lower shadow less than 2x real body. Can have very small upper shadow.
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MoreBullish 1 2
LessBullish/Bear
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VeryStrongSessions
StrongSessions
NeutralSessions
#
6
Name
Medium upper shadow Tall white
Characteristics
Same as line 4 but upper shadow 25% to 100% real body
Maintains the Strength but showing

increasing price rejection
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MoreBullish 1 2
LessBullish/Bear
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VeryStrongSessions
StrongSessions
NeutralSessions
#
7
Name
Long upper shadow tall white
Characteristics
Same as 4 but upper shadow more than 100% of real body
Rare candle Gives
slight fearful feeling
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MoreBullish 1 2
LessBullish/Bear
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VeryStrongSessions
StrongSessions
NeutralSessions

A drifting market
#
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Name
White spinning top
Characteristics
Can have upper and lower shadows less than 100% of real body
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MoreBullish 1 2
LessBullish/Bear
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VeryStrongSessions
StrongSessions
NeutralSessions
#
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Name
Small white with bear shadow
Characteristics
Upper shadow from 1 to less than 2x real body. Can have small lower shadow.
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MoreBullish 1 2
LessBullish/Bear
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VeryStrongSessions
StrongSessions
NeutralSessions
#
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Name
Shooting star
Characteristics
Upper shadow at least 2x real body. Can have small lower shadow.
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More Bearish 1 2 3 4 5 6 7
Less Bearish/Bullish 9 8 10
VeryWeakSessions
WeakSessions
NeutralSessions
BullishSessions
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More Bearish 1 2 3 4 5 8 6 7
Less Bearish/Bullish 9
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#
1
Name
Long black double crew cut
Characteristics
No shadows
Nison Notes
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Less Bearish/Bullish 9 8
10
VeryWeakSessions #
2
WeakSessions
NeutralSessions
BullishSessions Nison Notes
Name
Long black closing crew cut
Characteristics
Small Upper shadow
Upper shadow shows market can break under opening price
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VeryWeakSessions #
3
WeakSessions
NeutralSessions
Name
Shooting Star
Characteristics
Shadow 2x or more real body. Can have very small lower shadow.
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Less Bearish/Bullish
9 8
10
VeryWeakSessions #
4
WeakSessions
NeutralSessions
Name
Long black
Characteristics
Lower shadow 25% or less real body
Lower shadow shows demand at lower prices
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VeryWeakSessions #
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WeakSessions
NeutralSessions
Name
Small black with bear shadow
Characteristics
Upper shadow less than 2x real body. Can have very small lower shadow.
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9 8
10
VeryWeakSessions #
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WeakSessions
NeutralSessions
Name
Medium lower shadow long black
Characteristics
Same as line 4 but lower shadow 25% to 100% real body
Showing increasing demand and price rejection at lower levels
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9 8
10
VeryWeakSessions #
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WeakSessions
NeutralSessions
Name
Long lower shadow black
Characteristics
Same as 4 but lower shadow more than 100% of real body
slight fearful feeling to bears
Rare candle Gives
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VeryWeakSessions #
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WeakSessions
NeutralSessions

A drifting market
Name
Black spinning top
Characteristics
Can have upper and lower shadows less than 100% of real body
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More Bearish 1 2 3 4 5 8
Less Bearish/Bullish 9
10
VeryWeakSessions #
9
WeakSessions
NeutralSessions
Name
Small black with bull shadow
Characteristics
Lower shadow from 1 to less than 2x real body. Can have small upper shadow.
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VeryWeakSessions #
10
WeakSessions
NeutralSessions
Name
Hammer
Characteristics
Lower shadow at least 2x real body. Can have small upper shadow.
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Reviewedimportanceofrealbodies andshadows Whiterealbody/shadowprogressionfrom moretolessbullish Blackrealbody/shadowprogressionfrom moretolessbearish
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Candlesticks Re-Ignited!
Ad Advanced d Single Candle Lines: One sided shadow candles
Founder and President: Candlecharts.com www.candlecharts.com
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BASICCRITERIA
Market in a downtrend Real Body White or Black Small real body at, or near, top of range. Lower shadow at least 2x height real body A chance to buy at the bottom
STRICTCRITERIA
White real body No upper shadow
PATTERNPSYCHOLOGY
SUPPORT/MOMENTUM SUPPORT/ MOMENTUMTRADING
Low of hammer as support Consider shorting under low of pattern. After this last burst of selling, new buying has started. This rejection of lower prices is indicating a change in balance between bulls and bears. The net result: lessening of bears confidence of sustainability of lower price levels (and a reason for bulls to start getting more optimistic).
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White real body hammer is called a Power Candle Can have small upper shadow (around 10% of lower shadow) The more oversold and the longer the shadow, the higher degree of confidence Often a retest of lower shadow Bullish counterpart of Shooting Star (not a Hanging Man). A hammer with a open/high/close at high is a Dragonfly doji As a single candle line it is same in FX as other markets
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Acandlesticklineorpattern requirestwocriteria:
Theshapeofthelineorpattern Theprecedingtrend
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Hammer and trend
Notahammer
Powerline
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Hammer your way to profits
Dragonflydoji
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Retest of hammers shadow
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Hammer As Support
Will often retest lower shadow
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Hammer as Support
Marketwilloften retesthammers lowershadow
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Same Signal- But look at the Difference in Trading Tactics
Toknowwhere youstandisas importantas candlepattern recognition.
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Hammer Stops/Momentum
Exit (or short)
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Hammers and Stops/Momentum
Hammernearsupport Protectivestopor momentumtrade
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BASICCRITERIA
Market in a uptrend Small real body at, or near, top of range. Must come at new high for move or significant rally Lower shadow at least 2x height real body S Suggests t a peak ki in th the market k t
PATTERNPSYCHOLOGY
Not used as resistance Momentum: Trend is still up with this signal
Although it may seem that the market still has rising power left, it has shown that once the market has fallen, it has become very fragile.
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Same as the hammer except, market in an uptrend Can have small upper shadow (around 10% of lower shadow) Must have bear confirmation with a lower close, or for those more aggressive, a lower opening This is not the bearish counterpart of Hammer. The Shooting Star is the bearish counterpart. Because of the bullish shadow, do not place much emphasis on this signal.
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Importance of Price confirmation

2 3
Pain!
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BASICCRITERIA
Market in an uptrend Black or White real Body Small real body at, or near, bottom of range. Upper shadow at least 2x height real body A crack has entered the market
STRICTCRITERIA
Black real body No lower shadow

High of shooting star as resistance Consider buying above high of pattern
PATTERNPSYCHOLOGY
The strong retreat from higher prices shows either or/and: 1) bulls stepping back at higher levels 2) bears getting more aggressive The result is that the bulls have second thoughts of their power and bears now have encouragement. 96
Black real body most important. Can have small lower shadow (around 10% of upper shadow). The more overextended the rally and the longer the shadow, the higher degree of confidence. Unlike a hammer, market doesnt often retest upper shadow. Bearish counterpart of Hammer (not Inverted Hammer.) A Shooting Star with a open/high/close at low is a Gravestone doji. As a single candle line this is the same in FX
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Shooting Star with Price Confirmation

confirmed
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Shooting star but no price confirmation
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Price Confirmation
Ifacandlesignalconfirmsawesternsignal,thereis lessneedforpriceconfirmation
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Stops and Momentum Trading

Closeoverhere wouldbeaplus forthebulls
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Gravestone Doji
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Gravestone Doji
Gravestone doji
Closeunder m.a.support
25day moving average
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BASICCRITERIA
Market in downtrend Small real body at, or near, bottom of range. Must come at new low for move or significant decline Upper shadow at least 2x height real body
PATTERNPSYCHOLOGY
Not used as support Momentum: Trend is still down with this signal
While the market closes at, or near its low, it has shown an ability to rise. This may get the bears slightly nervous.
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Same as the shooting star, except market in a downtrend Can have small lower shadow (around 10% of lower shadow) Must have bull confirmation with a higher g close, , or for those more aggressive, a higher opening This is not the bullish counterpart of Shooting Star. The Hammer is the bullish counterpart. Because of the bearish shadow, do not place much emphasis on this signal.
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Importance of Price Confirmation
Alwaysneedscandle confirmationwiththissignaland hangingmancandle.
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OnesidedcandleswithNison360 Candle Analysis:

Reviewofbasiccriteria StrictCriteria Usingassupportorresistance Detailedpsychologybehindeachpattern Momentumtrading Nisoninsights Whyhangingmanandinvertedhammer lineslessimportant SinglecandlelinesthesameinFX Importanceoftrend Cantbuy/selloneverycandlesignal
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Advanced Candles: The Blended Candle Line
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Japanese charts have meaning in a single candle, and when two candles are combined, the meaning becomes more significant.
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A blended candle is a way of compressing combinations of candle lines into as if they made one candle
Source: KABUSHIKISOUBA NO TECHNICAL BUNSEKI G.Ikutaro
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How do we make a Blended Candle?
close 2 open 1
1) Use open of the first session for open of blended candle 2) Use close of the last session of pattern for close of blended candle. 3) Use highest high and lowest close of all sessions for upper and lower shadows of blended candle.
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think of Blended candle as a Summary candle of the pattern analyzed. How does this help?
1 Todetermineifapattern isnetbullishorbearish 2 Tocomparevariationsofcandle patternsto determinethestrengthof thesignal
Classicdarkcloud cover
Howisthisnonclassicdark cloudcoverdifferent?What doesitmeantotheoutlook?112
Advanced Double Candle Lines: Tweezers
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CRITERIA
Twocandleswithmatchinghighs(tweezers top)orlows(tweezersbottom) Uptrendfortweezerstopanddowntrend fortweezersbottom.Buttrendnotcritical. Thefirstcandlemustbealongwhite (tweezerstop)orlongblack(tweezers bottom) 2nd candlemustreflectdiminishingofprior force
Source: HAJIMETE KABUKA CHATO WO YOMU HITO NO HON by K. Hoshi
PATTERNPSYCHOLOGY
Thefirstcandleshowsbulls(tweezerstop) orbears(tweezersbottom)aredominating. Withthesecondcandleshowinganinability tocontinuethemoveimpliedbythefirst candle,wearestartingtoseethepowerof 114 thepriortrenddissipating.
The more the 2nd candle closes into the first candle, the better the signal. This is a minor pattern unless there is a candle reversal signal that also emerges at the 2nd candle (i.e. piercing pattern, shooting star). Not used as support or resistance or momentum trading unless 2nd candle is a reversal candle. If both candles for tweezers top close at, or near the highs, or tweezers bottom close at or near the lows, this pattern would have less significance.
Source: HAJIMETE KABUKA CHATO WO YOMU HITO NO HON by K. Hoshi
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Tweezers top
Thinkthismarkethadtroublesnear$8.20?
Tweezerstop
Whyisthisnot aTweezers bottom?

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Tweezers Bottom
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UsingtheBlendedCandletoincreasecandle insights:

Iscombinationofcandlelinesbullishorbearish? Isthecandlepatternmore orless strict?
Tweezerstopsandbottoms correct interpretation
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Advanced Double Candle Lines: The Bull Signals
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Bullish Counter Attack Pattern
Piercing Pattern
Bullish Engulfing Pattern
Bull Sash Pattern
Bull Separating Line
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BASICCRITERIA
Two session pattern Downtrend but even with no apparent trend, would be a positive signal Black real body followed by a long white real body that gaps lower on the open and then closes at or near black candle close. 2nd candle tall white
STRICTCRITERIA
Both candles are large (very rare)
PATTERNPSYCHOLOGY
Not used as support or resistance. Consider selling on move under low of pattern. With the gap down, bears are relieved. The bulls are backed into a corner and came out fighting in a heroic fight. Kamikaze fights are always frightening, so the bears seeing this take to the sidelines and the bulls may get reinforcements.
122
No pattern like this for FX since the market gaps lower. While the ideal pattern is both large real bodies, we would still view this as important even if only the white candle dl was large l Closes do not have to be exactly the same Opposite of bearish counter attack
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Bull Counter Attack
Whatdoyouthink thebearsarethinking afterthissession? PS watchyour language!
Bull Counter Attack
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BASICCRITERIA
Two session pattern Market in downtrend Open of white candle under prior close White candle closes more than way into black real body.
STRICTCRITERIA
White candle opens under prior low Long black and tall white candle
PATTERNPSYCHOLOGY
Lowest low of both candles as support Consider selling on move under support level Bears in control is echoed by long dark candle. Sharp gap lower means bears have a strong foothold. But, with sharp bounce back by end of the session, the market has displayed uneasiness at a low price. The bears now sense danger.
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For FX, intraday and indexes can have the same (or within 2 pips for FX) open as prior close Long black and then long white shows extreme shift in psychology The more the white candle opens under prior low /close, the better the signal (for non FX). Opposite of dark cloud cover Related patterns which need not be remembered are on-neck (atekubi), inneck(irikubi) and thrusting (sashikomi).
FXPattern
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Piercing pattern as support
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Piercing Pattern
Andthis?
NotPiercingPatterns
Althoughfirstcandlewasnt longblack,whatpatternisthis?
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Piercing Pattern
Notapiercing pattern
Forintradayokayto haveopenat orvery close topriorclose
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Early clues of shifting supply/demand
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BASICCRITERIA
Two session pattern Market in a downtrend White real body wraps around dark real body
STRICTCRITERIA
Small first candle small dark candle or doji Second candle is tall white that wraps around high-low range of first candle.

Lowest low of either candle as support Consider shorting under low of pattern.
PATTERNPSYCHOLOGY
Small first candle reflects deterioration of bear trend. Tall white candle leaves no doubt the bulls now in drivers seat.
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For FX, intraday and indexes can have the same open (or within 2 pips for FX) of prior close The pattern has less significance if the real bodies are about the same size. First candle can be doji Candles in Engulfing Pattern (large wraps around small candle) are opposite those in Harami Pattern (small candle in a large candle) If Bullish Engulfing pattern appears during rally, Japanese call it a last engulfing pattern, and may be buying climax. Confirmation close under close of white candle. This is not an important pattern, just think about not buying.
FXPattern
132
This is interesting: I recently purchased a technical analysis package from a WELL KNOWN technical analysis guru. During his charting presentation he made several references to candlestick patterns, and each references that he made was absolutely wrong! During a strong uptrend, he called a large white real body after a small black real body a bullish engulfing pattern. If I remember right a bullish engulfing pattern doesnt count during an uptrend. If I hadnt bought and studied your package, I never would have known that and would have assumed that he was right. Thanks again for your great work! Carl
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Bullish Engulfing Patterns
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Price confirmation
Nopriceconfirmation afterthisbullish engulfingpattern
Whydidnt Ihavethis windowas resistance?
Priceconfirmation afterthisbullish engulfingpattern, butriskisstillto lowofpattern
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Price confirmation
Ifyouwaitedfortheclose ofsessionofthebullengulf lookatwhatpriceyou wouldbebuying.
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Momentum trade
Whywouldyounot buyonthispattern?
Bearmomentumtrade
137
BASICCRITERIA
Two session pattern Market in downtrend, but trend not critical First candle unusually long dark candle Second candle is much smaller than 1st candle (about 25% or less). 2nd candle can be the same- or opposite colorof first candle 2nd real body is within 1st candles real body
PATTERNPSYCHOLOGY
Not used as support (unless candle is reversal signal (i.e. hammer) 2nd The long black candle echoes the heaviness of supply. But, the next sessions gap up, and lack of downside, follow through results in the bears seeing that their drive is becoming impeded.
Not used for momentum trading

138
For FX, intraday and indexes can have the same (or within 2 pips for FX) open as prior close If the 2nd candle is a doji, the pattern is called a harami cross The more the 2nd candle gets deeply into the black candle, the better the signal. Because FX, etc, white candle cant get deeply into black real body, it is best to wait for bull confirmation by a higher open or close than the white real body. In general, the less the 2nd candle gets into the black candle, the more confirmation is needed. Opposite of bearish harami
FXPattern
139
Bull harami
Thinkthemarketis differentonthis session comparedtoprior session?
140
Bull Harami
Potential Selling climax
141
Bull Harami and momentum trading
Momentum Trade
142
BASICCRITERIA
Trend not important Black candle followed by white candle that opens within black real body and closes over prior open.
STRICTCRITERIA
Both long real bodies 2nd candle closes over prior high White real body closes at, or near, its highs
PATTERNPSYCHOLOGY
Lowest low of both candles as support Consider selling on move under low of pattern The surprise gap, higher opening on the second day after a strong selling session, may initially be of minor concern. But, with the white candles strong close, the bears sense danger and also gives the bulls cause for optimism.
143
Since the market has to gap higher, this pattern not applicable to FX. The higher the market gaps on the open, and the higher the close on the white candle, the more meaningful the pattern Remember risk/reward since this pattern is completed after substantial move has already occurred. Opposite of Bear Sash pattern If open of white candle is same (or higher) as prior open, it is a Bull Separating Line.
144
Bull Sash Pattern
BullSash
145
Risk/Reward
BullSash BullSash
Bothofthesearepoortradecandidates
146
BASICCRITERIA
Trend not important Black candle followed by white candle that opens at (or above) prior open. Then closes over black candle open.
STRICTCRITERIA
Both long g real bodies (rare) ( ) White real body closes at, or near, its highs
PATTERNPSYCHOLOGY
Lowest low of both candles as support Consider selling on move under low of pattern
While the bears may be surprised to see the market gapping sharply higher from a prior weak session, imagine their fear (and the bulls happiness) as the market continues its advance without hesitation the next session. The tide of the market has changed from one to which the bears were in control to one where the bulls are now calling the shots.
147
Easy way to remember this pattern is the opens are the about the same (or the 2nd candle open gaps away from 1st candles open.) Since the market has to gap higher, this pattern not applicable to FX. FX Major challenge with this pattern is since it is completed after substantial move, it usually means poor risk/reward. Opposite of Bear Separating Pattern If open of white candle is within prior black real body, it is a Bull Sash Pattern.
148
Bull Separating line
149
Looks good on the outside!
Thisisapoortradecandidate why?
150
151
Bullseparating butlook whereitis!
152
Advanceddoublecandlebullsignalsusingcandle progressionusingindepthcandleanalysisfor:

Bullcounter attack PiercingPattern B llsash Bull h BullishEngulfingPattern BullSeparatinglines BullHaramiandconfirmation Howsomepatternshavepoorrisk/rewardand otherNisoninsights
153
Advanced Double Candle Lines: The Bear Signals
154
CANDLE PROGRESSION
DESCENDING BLACK REAL BODY
Bearish Counter Attack Pattern
Dark Cloud Cover
Bearish Engulfing Pattern
Bear Sash Pattern
Bear Separating Line
155
BASICCRITERIA
Two session pattern Uptrend but, even with no apparent trend would be a cautionary signal White real body followed by a black real body that gaps up on the open and then closes at or near white candles' close
STRICTCRITERIA
Both candles are large (very rare) Large black real body
PATTERNPSYCHOLOGY
Not used as support or resistance. Consider buying on breakout over high of pattern. With the tall white, and especially with the gap higher next session, the bulls are happy. But then a strong bear counter force comes in to drag the market back to the prior close. The tone of the market now shifts from bullish optimism to uncertainty. 156
No pattern like this for FX since the market gaps higher While the ideal pattern is both large real bodies, we would still view this p y the black even if only as important candle was large Closes do not have to be exactly the same Opposite of bullish counter attack
157
Bear Counter Attack
158
Bear Counter- Attack

Whilethisisnotabear counterattack sincethe closesarenotthesame do youthinkthereisachange in psychologyafterthissession?
BullCounterAttack?
159
BASICCRITERIA
Two session pattern Market in uptrend Open of black candle higher than prior close Black candle closes into white candle
STRICTCRITERIA
Bl Black k candle dl closes l more than th 50% i into t white hit real body Black candle opens above prior high Tall white and black candles
PATTERNPSYCHOLOGY
Highest high of both candles as resistance Consider buying on breakout over high of pattern White candle and then gap higher keeps bulls happy. But, with black candle finishing well below white candles close, the upward energy has cooled to the extreme causing the bulls to become concerned and bears bolder. 160
For FX, intraday and indexes can have the same (or within 2 pips for FX) open as prior close If the black candle doesnt get more than way into white, it is called an incomplete dark cloud cover and it is p best to wait for bear confirmation. The more the open on black candle gaps away from the prior high/close, the better the pattern (for non FX).
FXPattern
Opposite of piercing pattern
161
Dark Cloud Cover defines Resistance
162
Dark Cloud Cover at resistance
Whyisthis not tabullish b lli h engulfing pattern?
163
Dark Cloud Cover
164
Dark Cloud Cover and momentum
165
Dark Cloud Cover
Isthistelling youthatthere isashiftin psychology?
Not dark cloud cover
Chart courtesy of Genesis FT
166
Dark cloud rains pain for the bulls Ohcrap!

Thinkthere istrouble near$410?
Happytimefor thebulls new highclose!
167
BASICCRITERIA
Two session pattern Market in an uptrend Black real body wraps around light real body
STRICTCRITERIA
Small first candle small white or doji Second candle is long dark that wraps around high-low range of first candle.

Highest high of either candle as resistance. Consider buying on breakout over high of pattern.
PATTERNPSYCHOLOGY
Small first candle reflects rallying could be running out of steam Long black candle visually shows the bears are now the controlling force.
168
For FX, intraday and indexes can have the same (or within 2 pips for FX) open as prior close The pattern has less significance if the real bodies are about the same size. First candle can be doji Candles in Engulfing Pattern (large wraps ) are opposite pp those in around small candle) Harami Pattern (small candle in a large candle) If Bearish Engulfing pattern appears during selloff, Japanese call it a last engulfing pattern and may be selling climax. Confirmation is a close above black candle close. This is not an important pattern- just think about not selling.
FXPattern
169
Misinformation can cost you Big $$$
170
Candles as Support
S1
171
Momentum Trading
172
Candles and Momentum trading the breakouts
173
Price confirmation
Thelessidealthepattern the morecandleconfirmation isneeded. Whyisthisbearishengulfing patternlessthanideal?
Confirmation withlowerclose butrisk stilltohighof pattern
174
Price confirmation
Sincepatternconfirmed resistancelessreasonforprice confirmation butitdepends onyoutrading style.
175
BASICCRITERIA
Two session pattern Market in uptrend, but trend not critical First candle unusually long white candle Second candle is much smaller than 1st candle (about 25% or less). 2nd candle can be the same- or opposite colorof first candle 2nd real body is within 1st candles real body
PATTERNPSYCHOLOGY
Not used as resistance (unless 2nd candle is reversal signal (i.e. shooting star) Not used for momentum trading The indications based on the tall white candles vitality is for the rally to continue. But, next sessions gap down and then failure to resume the advance to beyond the prior session, shows those who had forecast strength are wrong! The rally could now be running out of fuel.
176
For FX, intraday and indexes can have the same (or within 2 pips for FX) open as prior close If the 2nd candle is a doji, the pattern is called a harami cross The more the 2nd candle gets deeply into the white candle, the better the signal. Because FX, etc, black cant get deeply into white candle, it is best to wait for bear confirmation by a lower open or close than black candles real body. In general, the less the 2nd candle gets more into the white candle, the more confirmation is needed. Opposite of bullish harami
FXPattern
177
Bear Harami
Becausethese arenearthe highsofthe priorcandle wouldwant bearcandle confirmation
NotBear Harami
178
Confirmation important in FX
179
BASICCRITERIA
Trend not important White candle followed by black candle that opens within white real body and closes under prior open.
STRICTCRITERIA
Both long real bodies 2nd candle closes under prior low Black real body closes at, or near, its lows
PATTERNPSYCHOLOGY
Highest high of both candles as resistance Consider buying on breakout over high of pattern The white candle means the bulls are running the show. The next session, the market gaps lower and is not only unable to make up this lost ground, but closes under the white candle. This shows the bullish energy has been sapped out of the market resulting in very scared bulls. 180
Since the market has to gap lower this pattern not applicable to FX. The more the market gaps down on the open, and the lower the close on the black candle, the more meaningful the pattern Keep in mind risk/reward since this pattern is completed after substantial move has already occurred. Opposite of Bull Sash pattern If open of black candle is same (or lower) as prior open, it is a Bearish Separating Line.
181
Bear Sash
BearSash
182
Bear Sash
BearSash
183
Being a Market Chameleon
BearSash
BullSash
184
BASICCRITERIA
Trend not important White candle followed by black candle that opens at (or below) prior open. Then closes under white candles open.
STRICTCRITERIA
B th long l l bodies b di (rare) ( ) Both real Black real body closes at, or near, its lows
PATTERNPSYCHOLOGY
Highest high of both candles as resistance Consider buying on move above high of pattern
With the gap down on 2nd day, the bulls sense danger. To make matters worse for them, the market cant even make up for the ground lost on the opening. The tide of the market momentum has now turned down.
185
Easy way to remember this pattern is the opens are the about the same (or the 2nd candle open gaps away from 1st candles open.) Since the market has to gap lower this pattern not applicable to FX. Major challenge with this pattern is since it is completed after substantial move, could mean poor risk/reward. Opposite of Bull Separating Pattern If open of black candle is within prior white real body, it is a Bear Sash Pattern.
186
Bear Separating line
187
Bear Separating Line
188
Bear Separating line
189
Advanceddoublecandlebearsignalsusingcandle progressionusingindepthcandleanalysisfor:

Bearcounter attack Darkcloudcover Bearsash BearishEngulfingPattern BearSeparatinglines Howsomepatternspoortradecandidates BearHaramiandconfirmation
190
191
Steves Favorite Candle pattern

192
A rising window is support
Support Zone
Mostimportant supportlevel
193
A falling window is resistance

Mostimportant resistancelevel
Resistance Zone
194
Small vs. Large windows
Large window Small window
195
Importance of Windows
ShootingStar
196
Importance of Windows
197
Large and Small Windows
S1
S2
198
Large and Small Windows
R2
R1
199
200
Change of Polarity
Resistance Resistance
Support
Support
201
202
Windows and Change of Polarity

Themostimportant aspectisthemany timesthisresistance wastested (which mayhavetodowith thewindow)
203
Island Tops and Bottoms and Candles
Island Top
Island Bottom
204
How Windows Give you a Jump on the Competition
Formedan islandbottomat thissession
S1?
205
How Windows Give you a Jump on the Competition
R1?
Formedan islandtopatthis session

206
Windows and Confirmation
Closedunderwindowby2and9 centsandnextdayopenedand closedoverwindowagain
207
Three windows-note of caution
208
Secrets of Using Intraday Candle Charts to Refine Entries with Windows
Forsmallwindows or when h nearthe th bottom b tt of f largerwindows lookfor intradaycandlereversals
209
Using intraday candles to confirm a Daily window
Turnsignalat $31.15onthis30 minutechart comparedto $31.60ondaily chart.
Whilethebottom ofthiswindow (reddashedline)didholdas support: 1)Basedonblackcandle,itlooked dangeroustobuy. 2)Bytheendofthebullengulf day,itwouldhavebeenapoor trade why?
Bottomof rising windowon dailychart
210
Advancedwindowtactics:

Reviewofwindowbasics Largecomparedtosmallwindows Change of h fPolarity l i and dwindows i d Islandtops/bottomsandwindows Confirmationwithintradaycandles
211

Advance Cabdlesticks Pattern

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SteveNisonsCandlesticksReIgnited: AdvancedCandlestickstoBoostConfidenceandSuccess

Founder and President: Candlecharts.com

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Candles reveal twice the information as a bar chart

Whatdotheseriesofbullish shadowstell usaboutsupply/demand near63.50? Isitanysurprisewhathappened afew weekslateratthatlevel?

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Candles or anytechnical systemcant forecast surprises

Founder and President: Candlecharts.com

INTRODUCING STEVE NISONS 360 CANDLE ANALYSIS

New Pattern inFXand nonFX

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New Detailedpsychology behindeachsignal 22

If early in uptrends/downtrends, or middle of a box range, doji is not important

Doji and Prior Move

Is the market overextended at these doji?

This doji is showing a shift in psychology since it comes during a rally

Is this doji telling us there is something different about the market?

Upper Shadow Doji:

Lower Shadow Doji:

Confirmation is important since market at tipping point.

East + West Confirmation

Whereacandle signal g confirmsa Westerntechnical signal

Canbeaclose(oropen)above(forbull candlesignal)orbelow(forbearcandle signal)thecloseofcandlesignal. LessimportanttohaveEast/West confirmation Lessimportantformomentumtrades Themoreidealthecandlepattern,the lessimportantthecandleconfirmation

Candles and Price Confirmation

Plusofpriceconfirmation: Improveoddsofhammerworking, But

Considerbuy/sellstoplimits Rememberrisk/reward! Dependsonyourtradingstyle Higherprobabilityatcostof profitpotential

Price confirmation cautions

Considerbuy/sellstoplimits Rememberrisk/reward! Dependsonyourtradingstyle Higherprobabilityatcostof profitpotential

Forex doji and Price Confirmation

Doji and Shadows

Doji and Momentum

Doji and momentum trading

Reviewofcandlebenefits Whatcandlesdontdo Ad an eddojitactics Advanced ta ti sandconcepts on epts Priceconfirmation

Founder and President: Candlecharts.com

BearishSessions Nison Notes

BearishSessions Nison Notes

Lower shadow shows market can break under opening price

BearishSessions Nison Notes

Upper shadow shows some rejection at higher prices

BearishSessions Nison Notes

BearishSessions Nison Notes

Maintains the Strength but showing

BearishSessions Nison Notes

Rare candle Gives

slight fearful feeling

BearishSessions Nison Notes

BearishSessions Nison Notes

BearishSessions Nison Notes

BullishSessions Nison Notes