| First of all, the trader should know by heart the 15 or | | | | trading. Others will wait until the next morning, to see |
| so major Japanese Candlestick Reversal Patterns. We | | | | whether prices opened lower, and if they do, then to |
| tend to forget, perhaps, that the most important | | | | take a bearish position at that time. Others will wait |
| single feature of the Candlesticks is their ability (when | | | | even longer. And some will do nothing, and the |
| properly interpreted) to forecast reversals of trend. | | | | opportunity will evaporate. |
| Every trader wants to know what prices are likely to | | | | Another one of the Japanese Candlestick Charting |
| do tomorrow. All trading and investing is built on | | | | Techniques involves seizing upon a bullish opening |
| guesses, or predictions, or forecasts, or hopes, for | | | | such as occurred on March 6, 2009. Doji patterns and |
| tomorrow. The Candlesticks are especially adept at | | | | Spinning Top patterns had erupted after a very long |
| discovering the mindset of traders which, after all, is | | | | downtrend. In concert with other indicators, the time |
| the driving force behind price action. There are | | | | appeared ripe to enter into a Long position, which |
| several rather daring Japanese Candlestick Charting | | | | seemed to be foolhardy at that time because, up to |
| techniques for taking advantage of early knowledge. | | | | that point, price action in the major Indexes had |
| Let's take the example of the Shooting Star reversal | | | | been almost unremittingly Down. However, once |
| pattern The Shooting Star looks very much like its | | | | again knowledge of the key Candlestick trend |
| namesake. It will appear after a long uptrend, far | | | | reversal patterns overcame some traders' natural |
| above the last previous price, way up there in price | | | | resistance; and those who did make the jump into |
| clouds, sporting a tiny head, a long tail, and will be | | | | Long positions were rewarded by a dramatic change |
| pointing at the Earth. It is a loner. We read the | | | | in immediate trend and a very long and profitable rally |
| Shooting Star as a temporary price aberration which | | | | in a bear market. |
| will very likely be cured soon, quite possibly even as | | | | The point is this: being aggressive and striking "while |
| soon as tomorrow. Some traders who are very | | | | the iron is hot" when strong reversal patterns appear |
| much on the qui vive, upon seeing a Shooting Star | | | | is one of the more aggressive Japanese Candlestick |
| forming, will wait until nearly the end of the trading | | | | Charting Techniques that can be very profitable. One |
| day and if, just before Closing, it still appears that a | | | | of the keys is knowing by heart the 15 or so most |
| Shooting Star will be the final pattern of the day, will | | | | reliable reversal patterns, and acting on them when |
| buy a Put option on the spot. That's ambitious | | | | they present themselves to you. |