Strategies for Profiting with Japanese Candlestick Charts


  • Format: PDF
  • Pages: 239
  • Published Date: 2013


The book that introduced traders everywhere how to unleash the awesome power of Japanese Candlestick is now better than ever! Written by the visionary who introduced candlesticks to traders in the West, this new edition of the international bestseller has been fully updated and revised for today’s more competitive and fickle markets. Your complete guide to all things candlesticks, it fills you in on what they are and where they come from, how to read and interpret them and how to use them to anticipate and capitalize on price moves and market changes with a degree of accuracy you never imagined was possible!

Author’s Introduction:

Candlestick charts give you insight into the psychology of the market. Another application of technicals, even if you are fundamentally oriented, is found when you seek value investments. With several companies available, which one do you buy? If you wanted to lighten up on a position, what do you sell? You sell those stocks that are in your resistance areas. So I like to look at it as the right hand helping the left. The technicals complement the fundamentals. And because so many traders and investors use charts now, charting itself has become a major market moving influence. Anything that moves the market is worth monitoring.

This concept is nothing new. I had a book translated called The Fountain of Gold, A Free Monkey Record of Money. Crazy title, don’t you think? The book observed, “When all are bearish, there is cause for prices to rise. When everyone is bullish, there is cause for the price to fall.” What does that sound like? Contrarian investing. The book was written in 1755. And just to put it in historical perspective, before America was a nation, the Japanese were using contrarian opinion. In fact, the Japanese were trading what they called “empty” rice contracts, which were the first futures contracts. This is where charting really began. These contracts were traded in Osaka, which was such an important trading area that to this day the traditional greeting in Osaka is, “Are you making a profit?”

An article about my work that appeared in the Japanese Economic Journal said, “To know the Japanese chart method is not enough, one must absorb the best parts of Western technicals.” The Japanese have the candles, but they know all the Western technical methods, too. So Japanese analysts and traders use their candlesticks—Eastern technicals—and they use Western technicals at the same time. Now it’s our turn to learn from them, to combine what I call the best of the East and the West.


  • The Basics: Candlestick Construction
  • Small Real Bodies and Long Sessions
  • Analysis Based on Shadows
  • Shooting Stars and High Waves
  • Engulfing Patterns
  • More Two-Candlestick Patterns
  • The Harami and Morning or Evening Star
  • Looking Through the Window
  • Mysteries of Support and Resistance
  • More Support and Resistance Insight
  • Retracement and Divergence
  • Head and Shoulders Analysis
  • Candlesticks in Context