Candlesticks Basic understanding

How to use them

Introduction to Candlesticks

• Use to time your entry in a stock or option

• Identifies possibility of current trend reversal or continuation

• Visually Appealing vs. Bar Charts

• Must be confirmed by another indicator

• Only for markets that have all data

Look For the 3 C’s

ContentClarity

Conformation

What Candlesticks Tell Us

Indicators that signal

1.A trend reversal 2.Conformation of trend3. Indecision in strength of

the Trend

Candlesticks

Bullish Real

Body Color:

-Hollow

-White

-Green

Bearish Real

Body Color:

-Shaded

-Black

-Red

Are You Ready For Some Basic Patterns?

Reversal Phenomena

Hammers & Hanging Man(Takuri and Kubitsuri)

STARS(Hoshi)

Continuation Formations

GAPS & WINDOWS

A. B.

C.

Where Can You Find Candlesticks on the Investools

Website

The Interactive Chart

• On the Graph Tab (Enter your Symbol)• Left Side Under Graph Links Select Interactive

Chart• Bottom Left of new Graph Click CLONE button• Maximize Window (if you are blind like me)• Top Left Default setting ‘Bar’ Click down arrow to

your right, select ‘Candle’• Apply Favorite Study Set (Workshop if you are

new, or Bowtie covered later)

Candlesticks Review

• Helpful to time entry an exit points

• Illustrates the battle between Buyers and Sellers.

• Not reliable to use as only indicator

• Easier to see direction of price moves

Resources*

Websites• www.IncredibleCharts.com• www.StockCharts.com• www.HotCandleCharts.com • www.CandleCharts.com • www.HardRightEdge.comBooks• Technical Analysis – PRING• Candlesticks - Steve Nision

*Other resources are available.