Steve Nison’s Candlesticks Re‐Ignited:

Advanced Candlesticks to Boost Confidence and Success

Founder and President: Candlecharts.com

Candlestick Western
Charting Charting
Techniques Tools
Steve Nison’s
Trading Triad
Success
System

Trade Management
1
www.candlecharts.com

“If you want to see farther,

you have to go higher”

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 Steve Nison’s Candlesticks Re‐Ignited:
Advanced Candlesticks to Boost Confidence and Success

Candlestick Charts

• Quickly read the

market’s
k ’ message
• “Safety First” Trading
• Early reversals

www.candlecharts.com 3

Reading the Market’s Message – Quickly and Accurately

Looks good

Bear Sterns
collapse

www.candlecharts.com 4

Reading the Market’s Message – Quickly and Accurately

Looks good?

www.candlecharts.com 5

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 Steve Nison’s Candlesticks Re‐Ignited:
Advanced Candlesticks to Boost Confidence and Success

Reading the Market’s Message – Quickly and Accurately

Looks good?

www.candlecharts.com 6

Reading the Psychology of the market

Think the $ had trouble in this area?

Bear shadows, evening star, bearish
engulfing patterns, shooting star…..

www.candlecharts.com 7

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 Steve Nison’s Candlesticks Re‐Ignited:
Advanced Candlesticks to Boost Confidence and Success

Negative Selection

Good buy?

www.candlecharts.com 9

What is one of the best ways to make money?

Those poor traders

who got fooled into
buying here.

10

Owning the Knowledge

Let see what the

candles tell us about
supply/demand
When prices get down
near $62.00-61.50?

www.candlecharts.com 11

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 Steve Nison’s Candlesticks Re‐Ignited:
Advanced Candlesticks to Boost Confidence and Success

Owning the Knowledge

Buying at hammer near $62.00

Target near $63.70 (resistance)

www.candlecharts.com 12

Get into a new

trend before other
traders see it

13

Reading the Market’s Message – Quickly and Accurately

Bear Stearns
Collapse

14

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 Steve Nison’s Candlesticks Re‐Ignited:
Advanced Candlesticks to Boost Confidence and Success

“Combinations of bullish and bearish

candle lines indicate the direction of the
market and investors psychological
conflicts at important turning points.”

15
www.candlecharts.com

It is easy to see who is How about now with these

in control here “spinning tops”?
16

Candles reveal
twice the
information as
a bar chart

17

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 Steve Nison’s Candlesticks Re‐Ignited:
Advanced Candlesticks to Boost Confidence and Success

Candles help us read the market’s message

What do the series of bullish shadows tell

us about supply/demand near 63.50?
Is it any surprise what happened a few
weeks later at that level?

www.candlecharts.com 18

Quickly see “ The Mode of the Market”

www.candlecharts.com 19

What candles do – and don’t do

What happen
each time this
gets near $43?

Candles‐ or
any technical
system can’t
forecast
surprises

www.candlecharts.com 20

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 Steve Nison’s Candlesticks Re‐Ignited:
Advanced Candlesticks to Boost Confidence and Success

Founder and President: Candlecharts.com 1

21

INTRODUCING STEVE NISON’S 360 CANDLE ANALYSIS

New – Strict criteria

of a candle signal
New – Nison
Insights New – Candles as
support/resistance

New – Pattern New – Price

in FX and confirmation of a
non FX candle signal

New – Momentum New – Detailed psychology

trading with candles behind each signal

WWW.CANDLECHARTS.COM 22

BASIC CRITERIA
• Open and close the same (or within a few cents or
pips)
• Market trending up or down
• Also called a cross
• Doji in a rally called Northern doji
• Doji in a decline called Southern doji
“A time to wait without a position in the market”

PATTERN PSYCHOLOGY
• For a sustainable rally, market has to be “pushed
up” - a doji shows the bullish momentum has now
been curbed. The bulls now become concerned with
this lack of sustained strength.
• Markets can sink of their own weight (i.e. don’t need
sellers to pull markets lower- lack of buyers will do
that) a doji hints buyers are now starting to absorb
supply.
• The market is at a delicate turning period and could
go either way.
123

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 Steve Nison’s Candlesticks Re‐Ignited:
Advanced Candlesticks to Boost Confidence and Success

 If early in uptrends/downtrends, or middle of a box range,

doji is not important

www.candlecharts.com 24

Doji and Prior Move

Is the market
overextended
at these doji?

www.candlecharts.com 25

This doji is showing a

shift in psychology since it Is this doji telling us there is something
comes during a rally different about the market?
www.candlecharts.com 26

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 Steve Nison’s Candlesticks Re‐Ignited:
Advanced Candlesticks to Boost Confidence and Success

Doji in a Box Range

www.candlecharts.com 27

 If early in uptrends/downtrends, or middle of a box

range doji not important
 Spinning tops and doji could be just a pause to a
continuing trend

www.candlecharts.com 28

29

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 Steve Nison’s Candlesticks Re‐Ignited:
Advanced Candlesticks to Boost Confidence and Success

The pause that refreshes?

www.candlecharts.com 30

 If early in uptrends/downtrends, or middle of a box

range doji not important
 Spinning tops and doji could be just a pause to a
continuing trend
 Doji generally work better at calling tops than
bottoms.

www.candlecharts.com 31

 If early in uptrends/downtrends, or middle of a box

range doji not important
 Spinning tops and doji could be just a pause to a
continuing trend
 Doji generally work better at calling tops than
bottoms.
 Analyze shadows. Interpretation will differ on the type
of upper and lower shadows
shadows.

Center Doji = Equal length shadows

Most classic doji where bulls and bears are in balance

Upper Shadow Doji:

Unsustainable buying strength

Lower Shadow Doji:

Some buying strength left in the market

Source: Kabushiki Keisen no Mikata Tsukaikata

Toshika No Tame No Senryakuzu- Kichitaro
Kisamori
 Confirmation is important since market at tipping point.

www.candlecharts.com 32

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 Steve Nison’s Candlesticks Re‐Ignited:
Advanced Candlesticks to Boost Confidence and Success

“Depending on the type of

movement on the next day, one can
get completely different readings”
readings

www.candlecharts.com 33

Confirmation
Two Kinds of Confirmation

 East + West

 Price Confirmation

34

East + West Confirmation

Where a candle
signal
g confirms a
Western technical
signal

35

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 Steve Nison’s Candlesticks Re‐Ignited:
Advanced Candlesticks to Boost Confidence and Success

Price Confirmation
Using a move after the initial candle signal to validate signal

 Can be a close (or open) above (for bull

candle signal) or below (for bear candle
signal) the close of candle signal.
 Less important to have East/West
confirmation
 Less important for momentum trades
 The more ideal the candle pattern, the
less important the candle confirmation

36

37

Candles and Price Confirmation

Plus of price confirmation:

Improve odds of hammer working,
But…

www.candlecharts.com 38

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 Steve Nison’s Candlesticks Re‐Ignited:
Advanced Candlesticks to Boost Confidence and Success

Price Confirmation Cautions

 Consider buy/sell stop limits

 Remember risk/reward!
 Depends on your trading style
 Higher probability at cost of
profit potential

40

Price confirmation cautions

 Consider buy/sell stop limits
 Remember risk/reward!
 Depends on your trading style
 Higher probability at cost of
profit potential

Confirmed

Hammer

www.candlecharts.com 41

Which of
these two
scenarios is
more
important
to have
bearish
price
confirmation
of the doji?

Note: this will not

happen in FX

www.candlecharts.com 42

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 Steve Nison’s Candlesticks Re‐Ignited:
Advanced Candlesticks to Boost Confidence and Success

Doji and Price Confirmation

New high
close and bull confirmed
shadow. Bear
confirmation thus
more important

www.candlecharts.com 43

Because a doji or
a spinning top in FX will
be near the prior session
close, you may want to
wait for bear confirmation

www.candlecharts.com 44

Forex doji and Price Confirmation

confirmed

Why would you not be too

nervous on this doji?

www.candlecharts.com 44A

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 Steve Nison’s Candlesticks Re‐Ignited:
Advanced Candlesticks to Boost Confidence and Success

Doji – but also a new high close

3
2 confirmed
1

What about this doji?

www.candlecharts.com 45

Which of
these two
scenarios is
more
important
to have
bearish
price
confirmation
of the doji?

www.candlecharts.com 46

Doji and Shadows

Equal shadows

B ll shadow
Bull h d

www.candlecharts.com 47

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 Steve Nison’s Candlesticks Re‐Ignited:
Advanced Candlesticks to Boost Confidence and Success

Criteria: Use the highest

high of those two sessions
(top of upper shadow) as
resistance
Implication: Close over that
area: market is “refreshed”.
That is when we consider
the bull momentum trade

www.candlecharts.com 48

Doji and Momentum

Doji as resistance

www.candlecharts.com 50

Doji and momentum trading

“Market refreshed”

www.candlecharts.com 51

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 Steve Nison’s Candlesticks Re‐Ignited:
Advanced Candlesticks to Boost Confidence and Success

Doji and momentum trading

Doji confirming
resistance

www.candlecharts.com 52

 Review of candle benefits

 What candles don’t do
 Ad an ed doji tactics
Advanced ta ti s and concepts
on epts
 Price confirmation

53

Founder and President: Candlecharts.com 54

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 Steve Nison’s Candlesticks Re‐Ignited:
Advanced Candlesticks to Boost Confidence and Success

Long Lower (Bullish) Shadows

Although this market is

descending, the long
lower shadows offsets
some of the negative
outlook

55

www.candlecharts.com 56

www.candlecharts.com 57

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 Steve Nison’s Candlesticks Re‐Ignited:
Advanced Candlesticks to Boost Confidence and Success

More Bullish Less Bullish/Bear

1 2 3 4 5 6 7 8 9 10

Very Strong Sessions Strong Sessions Neutral Sessions Bearish Sessions

© www.candlecharts.com 58

More Bullish Less Bullish/Bear

1 2 3 4 5 6 7 8 9 10

Very Strong Sessions Strong Sessions Neutral Sessions Bearish Sessions

# Name Characteristics Nison Notes

Tall white double crew

1 No shadows
cut

© www.candlecharts.com 59

More Bullish Less Bullish/Bear

1 2 3 4 5 6 7 8 9 10

Very Strong Sessions Strong Sessions Neutral Sessions Bearish Sessions

# Name Characteristics Nison Notes

Lower shadow shows

Tall white closing crew
2 Small lower shadow market can break
cut
under opening price

© www.candlecharts.com 60

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 Steve Nison’s Candlesticks Re‐Ignited:
Advanced Candlesticks to Boost Confidence and Success

More Bullish Less Bullish/Bear

1 2 3 4 5 6 7 8 9 10

Very Strong Sessions Strong Sessions Neutral Sessions Bearish Sessions

# Name Characteristics Nison Notes

Shadow 2x or more real body. Can have

3 Power line (hammer)
very small upper shadow.

© www.candlecharts.com 61

More Bullish Less Bullish/Bear

1 2 3 4 5 6 7 8 9 10

Very Strong Sessions Strong Sessions Neutral Sessions Bearish Sessions

# Name Characteristics Nison Notes

Upper shadow shows

Upper shadow 25%
4 Tall White some rejection at
or less real body
higher prices

© www.candlecharts.com 62

More Bullish Less Bullish/Bear

1 2 3 4 5 6 7 8 9 10

Very Strong Sessions Strong Sessions Neutral Sessions Bearish Sessions

# Name Characteristics Nison Notes

Small white with bull Lower shadow less than 2x real body. Can
5
shadow have very small upper shadow.

© www.candlecharts.com 63

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 Steve Nison’s Candlesticks Re‐Ignited:
Advanced Candlesticks to Boost Confidence and Success

More Bullish Less Bullish/Bear

1 2 3 4 5 6 7 8 9 10

Very Strong Sessions Strong Sessions Neutral Sessions Bearish Sessions

# Name Characteristics Nison Notes

“Maintains the
Medium upper shadow Same as line 4 but upper shadow 25% to Strength” but showing
6
Tall white 100% real body increasing price
rejection

© www.candlecharts.com 64

More Bullish Less Bullish/Bear

1 2 3 4 5 6 7 8 9 10

Very Strong Sessions Strong Sessions Neutral Sessions Bearish Sessions

# Name Characteristics Nison Notes

Long upper shadow tall Same as 4 but upper shadow more than Rare candle – ‘”Gives
7
white 100% of real body slight fearful feeling”

© www.candlecharts.com 65

More Bullish Less Bullish/Bear

1 2 3 4 5 6 7 8 9 10

Very Strong Sessions Strong Sessions Neutral Sessions Bearish Sessions

# Name Characteristics Nison Notes

Can have upper and lower shadows less “A drifting market”

8 White spinning top
than 100% of real body

© www.candlecharts.com 66

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 Steve Nison’s Candlesticks Re‐Ignited:
Advanced Candlesticks to Boost Confidence and Success

More Bullish Less Bullish/Bear

1 2 3 4 5 6 7 8 9 10

Very Strong Sessions Strong Sessions Neutral Sessions Bearish Sessions

# Name Characteristics Nison Notes

Small white with bear Upper shadow from 1 to less than 2x real
9
shadow body. Can have small lower shadow.

© www.candlecharts.com 67

More Bullish Less Bullish/Bear

1 2 3 4 5 6 7 8 9 10

Very Strong Sessions Strong Sessions Neutral Sessions Bearish Sessions

# Name Characteristics Nison Notes

Upper shadow at least

10 Shooting star 2x real body. Can have small lower
shadow.

© www.candlecharts.com 68

More Bearish Less Bearish/Bullish

1 2 3 4 5 6 7
9 10
8

Very Weak Sessions Weak Sessions Neutral Sessions Bullish Sessions

© www.candlecharts.com 69

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 Steve Nison’s Candlesticks Re‐Ignited:
Advanced Candlesticks to Boost Confidence and Success

More Bearish Less Bearish/Bullish

2 3 4 6 7
1
5 9
10
8

# Name Characteristics Nison Notes

Long black double crew

1 No shadows
cut

© www.candlecharts.com 70

More Bearish Less Bearish/Bullish

1 2 3 4 5 6 7
9
10
8

Very Weak Sessions Weak Sessions Neutral Sessions Bullish Sessions

# Name Characteristics Nison Notes

Upper shadow shows

Long black closing crew
2 Small Upper shadow market can break
cut
under opening price

© www.candlecharts.com 71

More Bearish Less Bearish/Bullish

1 2 3 4 5 6 7
9
10
8

Very Weak Sessions Weak Sessions Neutral Sessions Bullish Sessions

# Name Characteristics Nison Notes

Shadow 2x or more real body. Can have

3 Shooting Star
very small lower shadow.

© www.candlecharts.com 72

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 Steve Nison’s Candlesticks Re‐Ignited:
Advanced Candlesticks to Boost Confidence and Success

More Bearish Less Bearish/Bullish

1 2 3 4 5 6 7
9
10
8

Very Weak Sessions Weak Sessions Neutral Sessions Bullish Sessions

# Name Characteristics Nison Notes

Lower shadow shows

4 Long black Lower shadow 25% or less real body
demand at lower prices

© www.candlecharts.com 73

More Bearish Less Bearish/Bullish

1 2 3 4 5 6 7
9
10
8

Very Weak Sessions Weak Sessions Neutral Sessions Bullish Sessions

# Name Characteristics Nison Notes

Small black with bear Upper shadow less than 2x real body. Can
5
shadow have very small lower shadow.

© www.candlecharts.com 74

More Bearish Less Bearish/Bullish

1 2 3 4 5 6 7
9
10
8

Very Weak Sessions Weak Sessions Neutral Sessions Bullish Sessions

# Name Characteristics Nison Notes

Showing increasing
Medium lower shadow Same as line 4 but lower shadow 25% to
6 demand and price
long black 100% real body
rejection at lower levels

© www.candlecharts.com 75

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 Steve Nison’s Candlesticks Re‐Ignited:
Advanced Candlesticks to Boost Confidence and Success

More Bearish Less Bearish/Bullish

1 2 3 4 5 6 7
9
10
8

Very Weak Sessions Weak Sessions Neutral Sessions Bullish Sessions

# Name Characteristics Nison Notes

Rare candle – ‘”Gives

Long lower shadow Same as 4 but lower shadow more than
7 slight fearful feeling” to
black 100% of real body
bears

© www.candlecharts.com 76

More Bearish Less Bearish/Bullish

1 2 3 4 5 6 7
9
10
8

Very Weak Sessions Weak Sessions Neutral Sessions Bullish Sessions

# Name Characteristics Nison Notes

Can have upper and lower shadows less “A drifting market”

8 Black spinning top
than 100% of real body

© www.candlecharts.com 77

More Bearish Less Bearish/Bullish

1 2 3 4 5
9
10
8

Very Weak Sessions Weak Sessions Neutral Sessions Bullish Sessions

# Name Characteristics Nison Notes

Small black with bull Lower shadow from 1 to less than 2x real
9
shadow body. Can have small upper shadow.

© www.candlecharts.com 78

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 Steve Nison’s Candlesticks Re‐Ignited:
Advanced Candlesticks to Boost Confidence and Success

More Bearish Less Bearish/Bullish

1 2 3 4 5 6 7
9
10
8

Very Weak Sessions Weak Sessions Neutral Sessions Bullish Sessions

# Name Characteristics Nison Notes

Lower shadow at least 2x real body. Can

10 Hammer
have small upper shadow.

© www.candlecharts.com 79

 Reviewed importance of real bodies

and shadows

 White real body/shadow progression from

more to less bullish

 Black real body/shadow progression from

more to less bearish

80

Candlesticks
Re-Ignited!

Ad
Advanced d
Single Candle Lines:
“One sided” shadow
candles

Founder and President: Candlecharts.com

© www.candlecharts.com 81

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 Steve Nison’s Candlesticks Re‐Ignited:
Advanced Candlesticks to Boost Confidence and Success

BASIC CRITERIA
• Market in a downtrend
• Real Body White or Black
• Small real body at, or near, top of range.
• Lower shadow at least 2x height real body
“A chance to buy at the bottom”
STRICT CRITERIA
• White real body
• No upper shadow

PATTERN PSYCHOLOGY
After this last burst of selling, new buying
SUPPORT/MOMENTUM
SUPPORT/MOMENTUM TRADING has started. This rejection of lower prices is
indicating a change in balance between bulls
• Low of hammer as support
and bears. The net result: lessening of
• Consider shorting under low of bears’ confidence of sustainability of lower
pattern. price levels (and a reason for bulls to start
getting more optimistic).
www.candlecharts.com 82

 White real body hammer is called a

“Power Candle”
 Can have small upper shadow (around
10% of lower shadow)
 The more oversold and the longer the
shadow, the higher degree of
confidence
 Often a retest of lower shadow
 Bullish counterpart of Shooting Star
(not a Hanging Man).
 A hammer with a open/high/close at
high is a Dragonfly doji
 As a single candle line it is same in FX
as other markets

www.candlecharts.com 83

A candlestick line or pattern

requires two criteria:
• The shape of the line or pattern
• The preceding trend

84

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 Steve Nison’s Candlesticks Re‐Ignited:
Advanced Candlesticks to Boost Confidence and Success

Hammer and trend

Not a hammer

Power line

www.candlecharts.com 85

Hammer your way to profits

Dragonfly doji

www.candlecharts.com 86

Retest of hammer’s shadow

www.candlecharts.com 87

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 Steve Nison’s Candlesticks Re‐Ignited:
Advanced Candlesticks to Boost Confidence and Success

Hammer As Support

Will
often
retest
lower
shadow

www.candlecharts.com 88

Hammer as Support

Market will often

retest hammer’s
lower shadow

www.candlecharts.com 89

Same Signal- But look at the Difference in Trading

Tactics

“To know where

you stand is as
important as
candle pattern
recognition.”

www.candlecharts.com 90

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 Steve Nison’s Candlesticks Re‐Ignited:
Advanced Candlesticks to Boost Confidence and Success

Hammer – Stops/Momentum

Exit (or short)

www.candlecharts.com 91

Hammers and Stops/Momentum

Hammer near support

Protective stop or
momentum trade

www.candlecharts.com 92

BASIC CRITERIA
• Market in a uptrend
• Small real body at, or near, top of range.
• Must come at new high for move or
significant rally
• Lower shadow at least 2x height real body
“S
“Suggests
t a peak
k iin th
the market”
k t”

PATTERN PSYCHOLOGY
Although it may seem that the market
SUPPORT/MOMENTUM
SUPPORT/MOMENTUM TRADING still has rising power left, it has shown
• Not used as resistance that once the market has fallen, it has
• Momentum: Trend is still up with become very fragile.
this signal

www.candlecharts.com 93

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 Steve Nison’s Candlesticks Re‐Ignited:
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 Same as the hammer except, market in

an uptrend
 Can have small upper shadow (around
10% of lower shadow)
 Must have bear confirmation with a
lower close, or for those more
aggressive, a lower opening
 This is not the bearish counterpart of
Hammer. The Shooting Star is the
bearish counterpart.
 Because of the bullish shadow, do not
place much emphasis on this signal.

www.candlecharts.com 94

Importance of Price confirmation

2 3 Pain!

5
1 4

www.candlecharts.com 95

BASIC CRITERIA
• Market in an uptrend
• Black or White real Body
• Small real body at, or near, bottom of range.
• Upper shadow at least 2x height real body
“A crack has entered the market”

STRICT CRITERIA
• Black real body
• No lower shadow

SUPPORT/MOMENTUM
SUPPORT/MOMENTUM TRADING
PATTERN PSYCHOLOGY
• High of shooting star as resistance The strong retreat from higher prices shows either
or/and:
• Consider buying above high of 1) bulls stepping back at higher levels
pattern
2) bears getting more aggressive
The result is that the bulls have second thoughts of
their power and bears now have encouragement. 96

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 Steve Nison’s Candlesticks Re‐Ignited:
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 Black real body most important.

 Can have small lower shadow (around 10%
of upper shadow).
 The more overextended the rally and the
longer the shadow, the higher degree of
confidence.
 Unlike a hammer, market doesn’t often
retest upper shadow.
 Bearish counterpart of Hammer (not
Inverted Hammer.)
 A Shooting Star with a open/high/close at
low is a Gravestone doji.
 As a single candle line this is the same in
FX

www.candlecharts.com
97

Shooting Star with Price Confirmation

confirmed

www.candlecharts.com 98

Shooting star but no price confirmation

www.candlecharts.com 99

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 Steve Nison’s Candlesticks Re‐Ignited:
Advanced Candlesticks to Boost Confidence and Success

Price Confirmation

If a candle signal confirms a western signal, there is

less need for price confirmation

www.candlecharts.com 100

Stops and Momentum Trading

Close over here
would be a plus
for the bulls

www.candlecharts.com 101

Gravestone Doji

www.candlecharts.com 102

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 Steve Nison’s Candlesticks Re‐Ignited:
Advanced Candlesticks to Boost Confidence and Success

Gravestone Doji

Gravestone doji

Close under
m.a. support

25 day
moving
average

103
www.candlecharts.com

BASIC CRITERIA
• Market in downtrend
• Small real body at, or near, bottom of range.
• Must come at new low for move or significant
decline
• Upper shadow at least 2x height real body

PATTERN PSYCHOLOGY
While the market closes at, or near its
SUPPORT/MOMENTUM
SUPPORT/MOMENTUM TRADING low, it has shown an ability to rise. This
• Not used as support may get the bears slightly nervous.
• Momentum: Trend is still down with
this signal

www.candlecharts.com 104

 Same as the shooting star, except

market in a downtrend
 Can have small lower shadow (around
10% of lower shadow)
 Must have bull confirmation with a
higher
g close,, or for those more
aggressive, a higher opening
 This is not the bullish counterpart of
Shooting Star. The Hammer is the
bullish counterpart.
 Because of the bearish shadow, do not
place much emphasis on this signal.

www.candlecharts.com 105

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 Steve Nison’s Candlesticks Re‐Ignited:
Advanced Candlesticks to Boost Confidence and Success

Importance of Price Confirmation

Always needs candle

confirmation with this signal and
hanging man candle.

www.candlecharts.com 106

One sided candles with Nison 360° Candle

Analysis:
 Review of basic criteria
 Strict Criteria
 Using as support or resistance
 Detailed psychology behind each pattern
 Momentum trading
 Nison insights
 Why hanging man and inverted hammer
lines less important
 Single candle lines the same in FX
 Importance of trend
 Can’t buy/sell on every candle signal

107

Candlesticks
Re-Ignited!

Advanced
Candles:
The Blended
Candle Line

Founder and President: Candlecharts.com

www.candlecharts.com 108

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 Steve Nison’s Candlesticks Re‐Ignited:
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“Japanese charts have meaning in a

single candle, and when two candles
are combined, the meaning becomes
more significant.”

109
www.candlecharts.com

A blended candle is a way of “compressing” combinations

of candle lines into as if they made one candle

Source: KABUSHIKISOUBA NO
TECHNICAL BUNSEKI – G.Ikutaro
110

How do we make a Blended Candle?

close 2 =
open 1

1) Use open of the first session for open of blended candle

2) Use close of the last session of pattern for close of
blended candle.
3) Use highest high and lowest close of all sessions for
upper and lower shadows of blended candle.
111

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 Steve Nison’s Candlesticks Re‐Ignited:
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think of Blended candle as a “Summary candle” of the

pattern analyzed. How does this help?
2‐ To compare variations of candle
1‐ To determine if a pattern
patterns to determine the strength of
is net bullish or bearish
the signal

How is this non classic dark

Classic dark cloud cloud cover different? What
www.candlecharts.com
cover does it mean to the outlook?112

Candlesticks
Re-Ignited!

Advanced
Double Candle
Lines:
Tweezers

Founder and President: Candlecharts.com

www.candlecharts.com 113

CRITERIA
• Two candles with matching highs (tweezers
top) or lows (tweezers bottom)
• Uptrend for tweezers top and downtrend
for tweezers bottom. But trend not critical.
• The first candle must be a long white
(tweezers top) or long black (tweezers
bottom)
• 2nd candle must reflect diminishing of prior
force

Source: HAJIMETE KABUKA CHATO WO YOMU HITO NO

PATTERN PSYCHOLOGY
HON by K. Hoshi
The first candle shows bulls (tweezers top)
or bears (tweezers bottom) are dominating.
With the second candle showing an inability
to continue the move implied by the first
candle, we are starting to see the power of
the prior trend dissipating. 114

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 Steve Nison’s Candlesticks Re‐Ignited:
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 The more the 2nd candle closes into the

first candle, the better the signal.
 This is a minor pattern unless there is
a candle reversal signal that also
emerges at the 2nd candle (i.e. piercing
pattern, shooting star).
 Not used as support or resistance or
momentum trading unless 2nd candle is
a reversal candle.
 If both candles for tweezers top close
at, or near the highs, or tweezers
bottom close at or near the lows, this
Source: HAJIMETE KABUKA CHATO WO YOMU HITO NO
HON by K. Hoshi pattern would have less significance.

www.candlecharts.com 115

Tweezers top

Think this market had troubles near $8.20?

Tweezers top

Why is this not

a Tweezers
bottom?
www.candlecharts.com 116

Tweezers Bottom

www.candlecharts.com 117

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 Steve Nison’s Candlesticks Re‐Ignited:
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Using the “Blended Candle” to increase candle

insights:
 Is combination of candle lines bullish or bearish?
 Is the candle pattern more – or less – strict?

 Tweezers tops and bottoms – correct

interpretation

118

Candlesticks
Re-Ignited!

Advanced
Double Candle
Lines:
The Bull Signals

Founder and President: Candlecharts.com

www.candlecharts.com 119

www.candlecharts.com 120

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 Steve Nison’s Candlesticks Re‐Ignited:
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Bullish Piercing Bullish Bull Bull

Counter Pattern Engulfing Sash Separating
Attack Pattern Pattern Line
Pattern

www.candlecharts.com 121

BASIC CRITERIA
• Two session pattern
• Downtrend but even with no apparent trend,
would be a positive signal
• Black real body followed by a long white
real body that gaps lower on the open and
then closes at or near black candle close.
• 2nd candle tall white

STRICT CRITERIA
• Both candles are large (very rare)

PATTERN PSYCHOLOGY
With the gap down, bears are relieved. The
SUPPORT/MOMENTUM
SUPPORT/MOMENTUM TRADING “bulls are backed into a corner and came
• Not used as support or resistance. out fighting in a heroic fight. Kamikaze
• Consider selling on move under low fights are always frightening, so the bears
of pattern. seeing this take to the sidelines and the
bulls may get reinforcements.”
www.candlecharts.com 122

 No pattern like this for FX since

the market gaps lower.
 While the ideal pattern is both large
real bodies, we would still view this
as important even if only the white
candle
dl was large
l
 Closes do not have to be exactly
the same
 Opposite of bearish counter attack

www.candlecharts.com 123

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 Steve Nison’s Candlesticks Re‐Ignited:
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Bull Counter Attack

What do you think

the bears are thinking
after this session?

PS‐ watch your

language!

Bull
Counter
Attack

www.candlecharts.com 124

BASIC CRITERIA
• Two session pattern
• Market in downtrend
• Open of white candle under prior close
• White candle closes more than ½ way into
black real body.

STRICT CRITERIA
• White candle opens under prior low
• Long black and tall white candle

PATTERN PSYCHOLOGY
Bears in control is echoed by long dark
candle. Sharp gap lower means bears have a
SUPPORT/MOMENTUM
SUPPORT/MOMENTUM TRADING
strong foothold. But, with sharp bounce back
• Lowest low of both candles as by end of the session, the market has
support “displayed uneasiness at a low price.” The
• Consider selling on move under bears now sense danger.
support level 125
www.candlecharts.com

 For FX, intraday and indexes can have the

same (or within 2 pips for FX) open as prior
close
 Long black and then long white shows
extreme shift in psychology
 The more the white candle opens under
prior low /close, the better the signal (for
non FX).
 Opposite of dark cloud cover
 Related patterns which need not be
remembered are on-neck (atekubi), in-
FX Pattern neck(irikubi) and thrusting (sashikomi).

www.candlecharts.com 126

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 Steve Nison’s Candlesticks Re‐Ignited:
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Piercing pattern as support

www.candlecharts.com 127

Piercing Pattern

And this?

Not Piercing Patterns

Although first candle wasn’t

long black, what pattern is this?

www.candlecharts.com 128

Piercing Pattern

Not a piercing pattern

For intraday okay to

have open at‐ or very
close‐ to prior close

www.candlecharts.com 129

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 Steve Nison’s Candlesticks Re‐Ignited:
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Early clues of shifting supply/demand

www.candlecharts.com 130

BASIC CRITERIA
• Two session pattern
• Market in a downtrend
• White real body wraps around dark real
body

STRICT CRITERIA
• Small first candle small dark candle or doji
• Second candle is tall white that wraps
around high-low range of first candle.

SUPPORT/MOMENTUM
SUPPORT/MOMENTUM TRADING
PATTERN PSYCHOLOGY
• Small first candle reflects deterioration of
• Lowest low of either candle as
bear trend.
support
• Tall white candle leaves no doubt the bulls
• Consider shorting under low of
now in driver’s seat.
pattern.

www.candlecharts.com 131

 For FX, intraday and indexes can have the

same open (or within 2 pips for FX) of prior
close
 The pattern has less significance if the real
bodies are about the same size.
 First candle can be doji
 Candles in Engulfing Pattern (large wraps
around small candle) are opposite those in
Harami Pattern (small candle in a large
candle)
 If Bullish Engulfing pattern appears during
rally, Japanese call it a “last engulfing
pattern”, and may be buying climax.
FX Pattern Confirmation close under close of white
candle. This is not an important pattern, just
think about not buying.

www.candlecharts.com 132

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 Steve Nison’s Candlesticks Re‐Ignited:
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This is interesting: I recently purchased a

technical analysis package from a
“WELL KNOWN” technical analysis
guru. During his charting presentation
he made several references to
candlestick patterns, and each
references that he made was absolutely
wrong! …During a strong uptrend, he
called a large white real body after a
small black real body a bullish engulfing
pattern. If I remember right – a bullish
engulfing pattern doesn’t count during an
uptrend. If I hadn’t bought and studied
your package, I never would have known
that and would have assumed that he
was right.

Thanks again for your great work!

Carl

www.candlecharts.com 133

Bullish Engulfing Patterns

www.candlecharts.com 134

Price confirmation

No price confirmation Why didn’t

after this bullish I have this Price confirmation
engulfing pattern window as after this bullish
resistance? engulfing pattern,
but risk is still to
low of pattern

www.candlecharts.com 135

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 Steve Nison’s Candlesticks Re‐Ignited:
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Price confirmation

If you waited for the close

of session of the bull engulf
look at what price you
would be buying.

www.candlecharts.com 136

Momentum trade

Why would you not

buy on this pattern? Bear momentum trade

www.candlecharts.com 137

BASIC CRITERIA
• Two session pattern
• Market in downtrend, but trend not critical
• First candle unusually long dark candle
• Second candle is much smaller than 1st candle
(about 25% or less).
• 2nd candle can be the same- or opposite color-
of first candle
• 2nd real body is within 1st candle’s real body

PATTERN PSYCHOLOGY
The long black candle echoes the heaviness of
SUPPORT/MOMENTUM
SUPPORT/MOMENTUM TRADING supply. But, the next session’s gap up, and
• Not used as support (unless 2nd lack of downside, follow through results in the
candle is reversal signal (i.e. bears seeing that their drive is becoming
hammer) impeded.

• Not used for momentum trading

www.candlecharts.com 138

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 Steve Nison’s Candlesticks Re‐Ignited:
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 For FX, intraday and indexes can have

the same (or within 2 pips for FX) open
as prior close
 If the 2nd candle is a doji, the pattern is
called a harami cross
 The more the 2nd candle gets deeply
into the black candle, the better the
signal.
 Because FX, etc, white candle can’t get
deeply into black real body, it is best to
wait for bull confirmation by a higher
open or close than the white real body.
FX Pattern
 In general, the less the 2nd candle gets
into the black candle, the more
confirmation is needed.
 Opposite of bearish harami

www.candlecharts.com 139

Bull harami

Think the market is

different on this
session
compared to prior
session?

www.candlecharts.com 140

Bull Harami

Potential
Selling
climax

www.candlecharts.com 141

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 Steve Nison’s Candlesticks Re‐Ignited:
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Bull Harami and momentum trading

Momentum
Trade

www.candlecharts.com 142

BASIC CRITERIA
• Trend not important
• Black candle followed by white candle that
opens within black real body and closes over
prior open.

STRICT CRITERIA
• Both long real bodies
• 2nd candle closes over prior high
• White real body closes at, or near, its highs

PATTERN PSYCHOLOGY
The surprise gap, higher opening on the
SUPPORT/MOMENTUM
SUPPORT/MOMENTUM TRADING second day after a strong selling session,
may initially be of minor concern. But, with
• Lowest low of both candles as
the white candle’s strong close, the bears
support
sense danger and also gives the bulls cause
• Consider selling on move under low for optimism.
of pattern 143
www.candlecharts.com

 Since the market has to gap higher,

this pattern not applicable to FX.
 The higher the market gaps on the
open, and the higher the close on the
white candle, the more meaningful the
pattern
 Remember risk/reward since this
pattern is completed after substantial
move has already occurred.
 Opposite of Bear Sash pattern
 If open of white candle is same (or
higher) as prior open, it is a Bull
Separating Line.

www.candlecharts.com 144

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 Steve Nison’s Candlesticks Re‐Ignited:
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Bull Sash Pattern

Bull Sash

www.candlecharts.com 145

Risk/Reward

Bull Sash
Bull Sash

Both of these are poor trade candidates

www.candlecharts.com 146

BASIC CRITERIA
• Trend not important
• Black candle followed by white candle that opens at
(or above) prior open. Then closes over black candle
open.

STRICT CRITERIA
• Both long
g real bodies (rare)
( )
• White real body closes at, or near, its highs

PATTERN PSYCHOLOGY
While the bears may be surprised to see the market
gapping sharply higher from a prior weak session,
imagine their fear (and the bulls happiness) as the
SUPPORT/MOMENTUM
SUPPORT/MOMENTUM TRADING market continues its advance without hesitation the
• Lowest low of both candles as next session. The tide of the market has changed
support from one to which the bears were in control to one
where the bulls are now calling the shots.
• Consider selling on move under low
of pattern 147
www.candlecharts.com

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 Steve Nison’s Candlesticks Re‐Ignited:
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 Easy way to remember this pattern is

the opens are the about the same (or
the 2nd candle open gaps away from 1st
candles open.)
 Since the market has to gap higher,
this pattern not applicable to FX.
FX
 Major challenge with this pattern is
since it is completed after substantial
move, it usually means poor
risk/reward.
 Opposite of Bear Separating Pattern
 If open of white candle is within prior
black real body, it is a Bull Sash
Pattern.

www.candlecharts.com 148

Bull Separating line

www.candlecharts.com 149

Looks good on the outside!

This is a poor trade candidate‐ why?

www.candlecharts.com 150

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 Steve Nison’s Candlesticks Re‐Ignited:
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Bull Separating line

www.candlecharts.com 151

Bull Separating line

Bull separating but look

where it is!

www.candlecharts.com 152

Advanced double candle bull signals using candle

progression using in‐depth candle analysis for:
 Bull counter ‐ attack
 Piercing Pattern
 B ll sash
Bull h
 Bullish Engulfing Pattern
 Bull Separating lines
 Bull Harami and confirmation
 How some patterns have poor risk/reward and
other Nison insights

153

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 Steve Nison’s Candlesticks Re‐Ignited:
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Candlesticks
Re-Ignited!

Advanced
Double Candle
Lines:
The Bear Signals

Founder and President: Candlecharts.com

www.candlecharts.com 154

CANDLE PROGRESSION
DESCENDING BLACK REAL BODY

Bearish Dark Bearish Bear Bear

Counter Cloud Engulfing Sash Separating
Attack Cover Pattern Pattern Line
Pattern

155

BASIC CRITERIA
• Two session pattern
• Uptrend but, even with no apparent trend
would be a cautionary signal
• White real body followed by a black real
body that gaps up on the open and then
closes at or near white candles' close

STRICT CRITERIA
• Both candles are large (very rare)
• Large black real body

PATTERN PSYCHOLOGY
SUPPORT/MOMENTUM
SUPPORT/MOMENTUM TRADING With the tall white, and especially with the
• Not used as support or resistance. gap higher next session, the bulls are
happy. But then a strong bear counter force
• Consider buying on breakout over comes in to drag the market back to the
high of pattern. prior close. The tone of the market now
shifts from bullish optimism to uncertainty. 156

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 Steve Nison’s Candlesticks Re‐Ignited:
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 No pattern like this for FX since

the market gaps higher
 While the ideal pattern is both large
real bodies, we would still view this
p
as important y the black
even if only
candle was large
 Closes do not have to be exactly
the same
 Opposite of bullish counter attack

www.candlecharts.com 157

Bear Counter Attack

www.candlecharts.com 158

Bear Counter- Attack

While this is not a bear

counter attack since the
closes are not the same‐ do
you think there is a change in
psychology after this session?

Bull Counter Attack?

www.candlecharts.com 159

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 Steve Nison’s Candlesticks Re‐Ignited:
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BASIC CRITERIA
• Two session pattern
• Market in uptrend
• Open of black candle higher than prior close
• Black candle closes into white candle

STRICT CRITERIA
• Bl
Blackk candle
dl closes
l more than
th 50% iinto
t white
hit
real body
• Black candle opens above prior high
• Tall white and black candles

PATTERN PSYCHOLOGY
SUPPORT/MOMENTUM
SUPPORT/MOMENTUM TRADING White candle and then gap higher keeps bulls
happy. But, with black candle finishing well
• Highest high of both candles as
below white candle’s close, the “upward
resistance
energy has cooled to the extreme” causing
• Consider buying on breakout over the bulls to become concerned and bears
high of pattern bolder. 160

 For FX, intraday and indexes can have

the same (or within 2 pips for FX) open
as prior close
 If the black candle doesn’t get more
than ½ way into white, it is called an
“incomplete
p dark cloud cover” and it is
best to wait for bear confirmation.
 The more the open on black candle
gaps away from the prior high/close,
the better the pattern (for non FX).
 Opposite of piercing pattern
FX Pattern

www.candlecharts.com 161

Dark Cloud Cover defines Resistance

www.candlecharts.com 162

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 Steve Nison’s Candlesticks Re‐Ignited:
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Dark Cloud Cover at resistance

Why is this
nott a bullish
b lli h
engulfing
pattern?

www.candlecharts.com 163

Dark Cloud Cover

164

Dark Cloud Cover and momentum

www.candlecharts.com 165

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 Steve Nison’s Candlesticks Re‐Ignited:
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Dark Cloud Cover

Is this telling
you that there
is a shift in
psychology?

Not dark cloud cover

Chart courtesy of Genesis FT

www.candlecharts.com 166

Dark cloud rains pain for the bulls

“Oh crap!”

Think there
is trouble
near $410?
Happy time for
the bulls‐ new
high close!

www.candlecharts.com 167

BASIC CRITERIA
• Two session pattern
• Market in an uptrend
• Black real body wraps around light real
body

STRICT CRITERIA
• Small first candle small white or doji
• Second candle is long dark that wraps
around high-low range of first candle.

SUPPORT/MOMENTUM
SUPPORT/MOMENTUM TRADING
PATTERN PSYCHOLOGY
• Small first candle reflects rallying could be
• Highest high of either candle as
running out of steam
resistance.
• Long black candle visually shows the bears
• Consider buying on breakout over
are now the controlling force.
high of pattern.

www.candlecharts.com 168

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 Steve Nison’s Candlesticks Re‐Ignited:
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 For FX, intraday and indexes can have the

same (or within 2 pips for FX) open as prior
close
 The pattern has less significance if the real
bodies are about the same size.
 First candle can be doji
 Candles in Engulfing Pattern (large wraps
around small candle)) are opposite
pp those in
Harami Pattern (small candle in a large
candle)
 If Bearish Engulfing pattern appears during
selloff, Japanese call it a “last engulfing
pattern and may be selling climax.
Confirmation is a close above black candle
FX Pattern close. This is not an important pattern- just
think about not selling.

www.candlecharts.com 169

Misinformation can cost you Big $$$

www.candlecharts.com 170

Candles as Support

S1

www.candlecharts.com 171

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 Steve Nison’s Candlesticks Re‐Ignited:
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Momentum Trading

www.candlecharts.com 172

Candles and Momentum – trading the breakouts

www.candlecharts.com 173

Price confirmation

The less ideal the pattern the

more candle confirmation
is needed.
Why is this bearish engulfing
pattern less than ideal?

Confirmation
with lower close
but risk
still to high of
pattern

www.candlecharts.com 174

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 Steve Nison’s Candlesticks Re‐Ignited:
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Price confirmation

Since pattern confirmed resistance less reason for price

confirmation‐ but it depends on you trading style.

www.candlecharts.com 175

BASIC CRITERIA
• Two session pattern
• Market in uptrend, but trend not critical
• First candle unusually long white candle
• Second candle is much smaller than 1st
candle (about 25% or less).
• 2nd candle can be the same- or opposite
color- of first candle
• 2nd real body is within 1st candle’s real body

PATTERN PSYCHOLOGY
The indications based on the tall white
SUPPORT/MOMENTUM
SUPPORT/MOMENTUM TRADING candle’s vitality is for the rally to continue.
But, next session’s gap down and then failure
• Not used as resistance (unless 2nd to resume the advance to beyond the prior
candle is reversal signal (i.e. session, shows those who had forecast
shooting star) strength are wrong! The rally could now be
• Not used for momentum trading running out of fuel.
www.candlecharts.com 176

 For FX, intraday and indexes can have

the same (or within 2 pips for FX) open
as prior close
 If the 2nd candle is a doji, the pattern is
called a harami cross
 The more the 2nd candle gets deeply
into the white candle, the better the
signal.
 Because FX, etc, black can’t get deeply
into white candle, it is best to wait for
bear confirmation by a lower open or
close than black candle’s real body.
FX Pattern
 In general, the less the 2nd candle gets
more into the white candle, the more
confirmation is needed.
 Opposite of bullish harami

www.candlecharts.com 177

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 Steve Nison’s Candlesticks Re‐Ignited:
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Bear Harami

Because these
are near the
highs of the
Not Bear prior candle
would want
Harami
bear candle
confirmation

www.candlecharts.com 178

Confirmation important in FX

www.candlecharts.com 179

BASIC CRITERIA
• Trend not important
• White candle followed by black candle that
opens within white real body and closes
under prior open.

STRICT CRITERIA
• Both long real bodies
• 2nd candle closes under prior low
• Black real body closes at, or near, its lows

PATTERN PSYCHOLOGY
The white candle means the bulls are running
SUPPORT/MOMENTUM
SUPPORT/MOMENTUM TRADING the show. The next session, the market gaps
lower and is not only unable to make up this
• Highest high of both candles as
lost ground, but closes under the white
resistance
candle. This shows the bullish energy has
• Consider buying on breakout over been sapped out of the market resulting in
high of pattern very scared bulls. 180

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 Steve Nison’s Candlesticks Re‐Ignited:
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 Since the market has to gap lower this

pattern not applicable to FX.
 The more the market gaps down on the
open, and the lower the close on the
black candle, the more meaningful the
pattern
 Keep in mind risk/reward since this
pattern is completed after substantial
move has already occurred.
 Opposite of Bull Sash pattern
 If open of black candle is same (or
lower) as prior open, it is a Bearish
Separating Line.

www.candlecharts.com 181

Bear Sash

Bear Sash

www.candlecharts.com 182

Bear Sash

Bear Sash

www.candlecharts.com 183

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 Steve Nison’s Candlesticks Re‐Ignited:
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Being a Market Chameleon

Bear Sash

Bull Sash

www.candlecharts.com 184

BASIC CRITERIA
• Trend not important
• White candle followed by black candle that opens at
(or below) prior open. Then closes under white
candle’s open.

STRICT CRITERIA
B th long
• Both l reall bodies
b di (rare)
( )
• Black real body closes at, or near, its lows

PATTERN PSYCHOLOGY
With the gap down on 2nd day, the bulls sense
danger. To make matters worse for them, the
market can’t even make up for the ground lost on
SUPPORT/MOMENTUM
SUPPORT/MOMENTUM TRADING the opening. The tide of the market momentum has
now turned down.
• Highest high of both candles as
resistance
• Consider buying on move above
high of pattern 185
www.candlecharts.com

 Easy way to remember this pattern is

the opens are the about the same (or
the 2nd candle open gaps away from 1st
candle’s open.)
 Since the market has to gap lower this
pattern not applicable to FX.
 Major challenge with this pattern is
since it is completed after substantial
move, could mean poor risk/reward.
 Opposite of Bull Separating Pattern
 If open of black candle is within prior
white real body, it is a Bear Sash
Pattern.

www.candlecharts.com 186

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Bear Separating line

www.candlecharts.com 187

Bear Separating Line

www.candlecharts.com 188

Bear Separating line

www.candlecharts.com 189

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Advanced double candle bear signals using candle

progression using in‐depth candle analysis for:
 Bear counter ‐ attack
 Dark cloud cover
 Bear sash
 Bearish Engulfing Pattern
 Bear Separating lines
 How some patterns poor trade candidates
 Bear Harami and confirmation

190

Founder and President: Candlecharts.com

www.candlecharts.com 191

Steve’s
Favorite
Candle pattern
192

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 Steve Nison’s Candlesticks Re‐Ignited:
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A rising window is support

Support
Zone

Most important
support level

www.candlecharts.com 193

A falling window is resistance

Most important
resistance level

Resistance
Zone

www.candlecharts.com 194

Small vs. Large windows

Large
window

Small
window

www.candlecharts.com 195

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 Steve Nison’s Candlesticks Re‐Ignited:
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Importance of Windows

Shooting Star

www.candlecharts.com 196

Importance of Windows

www.candlecharts.com 197

Large and Small Windows

S1

S2

www.candlecharts.com 198

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 Steve Nison’s Candlesticks Re‐Ignited:
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Large and Small Windows

R2

R1

www.candlecharts.com 199

200

Change of Polarity

Resistance
Resistance

Support Support

201

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 Steve Nison’s Candlesticks Re‐Ignited:
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202

Windows and Change of Polarity

The most important

aspect is the many
times this resistance
was tested‐ (which
may have to do with
the window)

www.candlecharts.com 203

Island Tops and Bottoms and Candles

Island Top

www.candlecharts.com
Island Bottom 204

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 Steve Nison’s Candlesticks Re‐Ignited:
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How Windows Give you a Jump on the Competition

Formed an
island bottom at
this session

S1?

www.candlecharts.com 205

How Windows Give you a Jump on the Competition

R1?

Formed an
island top at this
session

www.candlecharts.com 206

Windows and Confirmation

Closed under window by 2 and 9

cents and next day opened and
closed over window again

www.candlecharts.com 207

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Three windows-note of caution

www.candlecharts.com 208

Secrets of Using Intraday Candle

Charts to Refine Entries with Windows

For small windows – or

when
h near the
th bottom
b tt off
larger windows – look for
intraday candle reversals

209

Using intraday candles to

confirm a Daily window

Turn signal at
$31.15 on this 30
minute chart
compared to
$31.60 on daily
chart.

Bottom of
While the bottom of this window
rising
(red dashed line) did hold as window on
support: daily chart
1)Based on black candle, it looked
dangerous to buy.
2)By the end of the bull engulf
day, it would have been a poor
trade‐ why? www.candlecharts.com 210

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 Steve Nison’s Candlesticks Re‐Ignited:
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Advanced window tactics:

 Review of window basics
 Large compared to small windows
 Change
h off Polarity
l i andd windows
i d
 Island tops/bottoms and windows
 Confirmation with intraday candles

211

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