Money-Making Candlestick Patterns is another book in a long line of books professing a way to make money at trading. Unlike so many of those books, though, Palmquist’s writing style is fluid and easy to follow. His logical and ordered approach to discussing the somewhat abstract notion of trading with candlestick patterns transforms the abstract into the concrete, and his detailed discussion of MAT and how he applies it to his trading gives the reader practical and applicable trading information. Additionally, his overall sensibility regarding the fundamental truth about trading-successful trading is about putting the odds in your favor-flows throughout the book, and, if the reader gets nothing from the candlestick patterns Palmquist puts forth as money makers, this fundamental truth alone, if digested and truly understood, is worth the price of the book.
One of the most notable books on the subject is Japanese Candlestick Charting Techniques by Steve Nison. But, what is amazing to me, is that even learning from the father of candlesticks himself, you run the risk of misinterpreting the definitions of these candlestick patterns. Often vague in description, the same candlestick pattern can be used differently by different traders for very different results. What Steve Palmquist hands you is his detailed research into how to best define the most popular candlestick patterns for less ambiguity and more profitability.
In chapter 1, he reviews the basic candlestick and the background into his testing methods. His knowledge on backtesting is vast and evident in the subsequent chapters on the bullish engulfing, bearish engulfing, hammer, hanging man, morning star, and evening star patterns. Each chapter breaks down the pattern to examine how different parameters impact results. In an organized and detailed manner, Steve presents the reader with the definitions that most often produce profitable trades.
However, some of the most important information is presented in the last chapter. This is where Steve introduces you to how to use his research; by implementing his unique system of trading, one he calls Market Adaptive Trading. It is in this chapter that he really pulls all of his research together and gives you a way to put it to work immediately. Proving that some patterns work better under certain market conditions, Steve will show you how to use candlesticks most effectively by using only the highest probability setups; truly, the key to trading.
To bring this full circle, let’s finish dissecting the end of my personal definition of trading – “then it becomes a matter of entry and management.” In other words, here is where the psychology comes in to play. Once you learn how, the intelligence actually required to enter and manage a trade is minimal. The ability to do so; is rare. This is where you become your own worst enemy, and is the level that even the most astute traders seldom pass. You must have the knowledge to know; the patience to wait; and the discipline to handle. Even with all of this research, it is ultimately up to us, the astute traders, to manage the trade properly. The goal, of course, is to increase the winners and minimize the losers. This book prepares you to do just that.
- Candlestick Basics and Testing Requirements
- Bullish Engulfing Patterns
- Bearish Engulfing Patterns
- Hammer Patterns
- Hanging Man Patterns
- Morning Star Patterns
- Evening Star Patterns
- Market Adaptive Trading Techniques