| Cancel "Mystery Night at the Bijou." There is nothing | | | | thinking and worrying about on that particular day, or |
| mysterious about the Candlesticks, or about | | | | what they are thinking about at this very moment if |
| Japanese Candlestick Charting. Actually, they are | | | | price action is being shown in real time. Price display is |
| almost self-defining, because Candlestick patterns are | | | | truly a "movie" when it is shown in real time. |
| pictures, and the eye is designed to recognize | | | | Japanese Candlestick Charting is most useful in |
| pictures. | | | | scouting out reversals of trend within candlestick |
| Candlestick charting begins with the old familiar bar | | | | chart patterns, whether as reversals are happening |
| chart, the format which has been in use for hundreds | | | | or are soon to emerge. Candlestick analysis works |
| of years. Nearly everyone who invests or trades | | | | equally well on all financial vehicles across all time |
| understands the bar chart, which reports prices in the | | | | frames- whether the Indexes, or individual stocks, or |
| form of a vertical line the top and bottom of which | | | | the commodities, or Forex. The basic principles are |
| represents the high and the low price of the day and | | | | the same throughout. It can be immensely gratifying |
| in which the opening price is shown by a little tab on | | | | to spot an incipient reversal even before it takes final |
| the left side of the line and the closing price by a little | | | | shape and then to see it come to fruition and |
| tab on the right side. Japanese Candlestick Charting | | | | produce the result that it foretold. |
| price presentation builds on that by "fattening-out" | | | | You may have heard that you must memorize a |
| that part of the vertical line which represents the | | | | hundred or more Japanese Candlestick patterns. That |
| price area between the open and the close. The | | | | is simply not so. There are only 15 or so that appear |
| result appears to be a cylinder within a portion of the | | | | the most frequently and have the best record of |
| total price bar. If the closing price (or the current | | | | accuracy in their inherent predictions. Included among |
| price, if the market is then trading) is higher than the | | | | the Magic 15 are the Dark Cloud Cover, the Doji, the |
| opening price, then the cylinder is left blank, or white; | | | | Shooting Star, the Evening Star, the Morning Star, |
| if the closing (or current) price is lower than the | | | | the Hammer, the Bullish Engulfing and the Bearish |
| opening price, then the cylinder is filled in black. | | | | Engulfing, and the Piercing pattern. My own favorite is |
| There is nothing at all in Japanese Candlestick | | | | the Shooting Star, because it looks so like the |
| Charting which conflicts with the old bar chart or with | | | | phenomenon for which it is named. You will learn |
| anything else that you may have learned along the | | | | these very quickly; it's very intuitive, helped along of |
| way. On the contrary: it builds upon all of that | | | | course because the patterns and their names fit so |
| knowledge. | | | | well together. You will find that you can learn them in |
| One of the most important attributes of the | | | | an evening's reading; and once learned, the |
| Candlesticks is that they reveal the underlying | | | | knowledge and the ability to spot them on sight will |
| psychology of the traders as a group. The computer | | | | never leave you. |
| operator can see in an instant what the traders were | | | | |