Candlestick Charting Demystified presents investors with step-by-step self-learning guide to mastering technical analysis of price movements in securities, derivatives, or currencies. Candlestick charting fits nicely into this environment. The broader picture provided by technical analysis is complemented by the deeper look into the mindset of traders that candlestick charting can provide. By combining these elements into a macro-micro combination, the macro messages sent by the market meld well with the micro messages given by candlestick charting. Defining candlestick charting as micro does not diminish its importance. On the contrary, the micro, or short-term, aspect of candlestick charting can allow a trader to enter trades or take profits much more quickly than those who rely on broad-based methodologies. In other words, using candlestick charts allows a trader to execute his or her plan with the precision of a surgeon’s scalpel instead of a lumberjack’s chainsaw.
This book demonstrates the depth of knowledge that candlestick charting provides and explains how you can use this methodology effectively to increase your odds of trading success. It begins by providing a basic knowledge of candlestick charting and the theory behind it and then progresses to a deeper discussion of technical analysis, which will give you extra tools to help you identify higher percentage trading opportunities.
Chapter 1 makes the case for technical analysis, which is the broad discipline of market analysis to which candlestick charting belongs. Chapter 2 shows how candlestick charting stacks up against other popular charting methods and why it is superior. Chapter 3 explains how to construct candlesticks and the data components needed. Chapters 4 and 5 demonstrate the various candle reversal and continuation patterns as well as the theories behind them. These patterns will be presented with their own diagrams and chart examples to show real-world examples. It is essential that you thoroughly understand the concepts in Chapters 1–5 before progressing to the remaining chapters.
Chapters 6–10 build on the basic foundation laid in the opening chapters. The tools and concepts introduced in Chapters 6–10 will help you uncover higher percentage trading opportunities by concentrating on candle patterns that are confirmed by other indicators. This is known as a “weight of the evidence” trading methodology, which will increase your chances of making successful trades. The concepts presented and discussed in these chapters include trends, moving averages, support/resistance, momentum indicators, and volume analysis. I will even introduce a couple of new indicators that I have developed and use in my own trading.
Throughout this book, you will also notice that the concept of risk is addressed. Any time a trader takes a position to attempt to make a profit in the market, he or she is exposed to an element of risk—which, simply stated, is the chance that money could be lost on the trade. By using the concepts of trend, momentum, and stop placement, a trader can control risk so that losing trades are not devastating to his or her trading account. Not every trade you make will –be a winner, and successful traders always have well-defined exit plans to be executed when a trade turns against them. All of these elements will be combined in Chapter 10 when specific trading examples are presented.
By the time you have finished this book, you will be more confident in selecting trading opportunities that have a higher probability of success. Successful trading takes practice, patience, and discipline. By using the concepts presented in this book, you should have a solid foundation that will increase your chances of trading success.
- The Case for Candlesticks
- Candlestick Charting in Technical Analysis
- Candlestick Construction and Basic Candle Lines
- Candlestick Reversal Patterns
- Candlestick Continuation Patterns
- Sakata’s Strategies and Longer Term Candle Patterns
- Basic Technical Analysis
- Candlesticks and Momentum Indicators
- Candlesticks and Volume
- Weight of the Evidence—Trading Examples
Candlestick Charting Demystified By Wayne A. Corbitt pdf