Candlestick Charting.pdf - Trading Software

276 Pages·2008·6.73 MB·English

by  Logan, Tina

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Getting Started in
CANDLESTICK
CHARTING
Tina Logan
JOHN WILEY & SONS, INC.
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Getting Started in
CANDLESTICK
CHARTING
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The Getting Started inSeries
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Getting Started in Asset Allocationby Bill Bresnan and Eric P. Gelb
Getting Started in Online Investingby David L. Brown and Kassandra Bentley
Getting Started in Investment Clubsby Marsha Bertrand
Getting Started in Internet Auctionsby Alan Elliott
Getting Started in Stocksby Alvin D. Hall
Getting Started in Mutual Fundsby Alvin D. Hall
Getting Started in Estate Planningby Kerry Hannon
Getting Started in Online Personal Financeby Brad Hill
Getting Started in 401(k) Investingby Paul Katzeff
Getting Started in Internet Investingby Paul Katzeff
Getting Started in Security Analysisby Peter J. Klein
Getting Started in Global Investingby Robert P. Kreitler
Getting Started in Futures, Fifth Edition,by Todd Lofton
Getting Started in Financial Informationby Daniel Moreau
and Tracey Longo
Getting Started in Emerging Marketsby Christopher Poillon
Getting Started in Technical Analysisby Jack D. Schwager
Getting Started in Real Estate Investingby Michael C. Thomsett
and Jean Freestone Thomsett
Getting Started in Tax-Savvy Investingby Andrew Westham and Don Korn
Getting Started in Annuitiesby Gordon M. Williamson
Getting Started in Bonds, Second Edition,by Sharon Saltzgiver Wright
Getting Started in Retirement Planningby Ronald M. Yolles and Murray Yolles
Getting Started in Online Brokersby Kristine DeForge
Getting Started in Project Managementby Paula Martin and Karen Tate
Getting Started in Six Sigmaby Michael C. Thomsett
Getting Started in Currency Tradingby Michael D. Archer
and James L. Bickford
Getting Started in Rental Incomeby Michael C. Thomsett
Getting Started in REITsby Richard Imperiale
Getting Started in Property Flippingby Michael C. Thomsett
Getting Started in Fundamental Analysisby Michael C. Thomsett
Getting Started in Hedge Funds, Second Editionby Daniel A. Strachman
Getting Started in Chart Patternsby Thomas N. Bulkowski
Getting Started in ETFsby Todd K. Lofton
Getting Started in Swing Tradingby Michael C. Thomsett
Getting Started in Options, Seventh Editionby Michael C. Thomsett
Getting Started in A Financially Secure Retirementby Henry Hebeler
Getting Started in Candlestick Charting by Tina Logan
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Getting Started in
CANDLESTICK
CHARTING
Tina Logan
JOHN WILEY & SONS, INC.
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Copyright © 2008 by Tina Logan. All rights reserved
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
Published simultaneously in Canada.
No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or
by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted
under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written
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addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030,
[phone], fax [phone], or online at http://www.wiley.com/go/permissions.
Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in
preparing this book, they make no representations or warranties with respect to the accuracy or completeness
of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a
particular purpose. No warranty may be created or extended by sales representatives or written sales materials.
The advice and strategies contained herein may not be suitable for your situation. You should consult with a
professional where appropriate. Neither the publisher nor author shall be liable for any loss of profit or any
other commercial damages, including but not limited to special, incidental, consequential, or other damages.
For general information on our other products and services or for technical support, please contact our
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Library of Congress Cataloging-in-Publication Data:
Logan, Tina.
Getting started in candlestick charting / Tina Logan.
p. cm. — (The getting started in series)
Includes bibliographical references and index.
ISBN 978-0-470-18200-0 (pbk.)
1. Stocks—Charts, diagrams, etc. 2. Stocks—Prices—Forecasting.
3. Investment analysis. I. Title.
HG4638.L64 2008
332.63’2042—dc22
2008002758
Printed in the United States of America
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Contents
Preface vii
Acknowledgments xi
PART I
CANDLESTICK CHARTING
Chapter 1
Introduction to Candlestick Charting 3
Chapter 2
Constructing Candlestick Lines 11
Chapter 3
Candlestick Reversal Patterns 27
Chapter 4
More on Reversal Patterns 79
Chapter 5
Tails 91
PART II
EAST MEETS WEST
Chapter 6
Price,Volume,and Volatility 99
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vi CONTENTS
Chapter 7
Trend Analysis 115
Chapter 8
Gaps 151
Chapter 9
Support and Resistance 175
Chapter 10
Putting Candlestick Reversal Patterns to Work 199
Chapter 11
Practice Sets 217
Conclusion 233
Appendix A 235
Appendix B 239
Glossary 243
Bibliography 249
About the Author 251
Index 253
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Preface
If the markets moved in a logical fashion, anyone could learn a few basics
and make money trading. But that is not the case. It is the emotional crowd
that moves markets. Traders’ and investors’ greed and fear, imprinted on
charts, are like a road map to the markets. Those who learn to read and deci-
pher the underlying messages of that price movement can gain a much-needed
edge in a competitive environment.
That’s where Getting Started in Candlestick Chartingcomes in. This book
will provide you with a solid foundation from which to begin using candlestick
charts. You’ll learn to recognize candlestick reversal patterns and embed them
in your mind through an understanding of how they reflect the messages of
crowd sentiment. Candlesticks will help you gauge the strength of price moves
and spot potential reversals early, before the crowd reacts.
If you have steered clear of candlestick charting until now because it
seems like there is a mind-numbing number of patterns to learn, you can put
that concern to rest. It is not necessary to learn dozens of candlestick patterns.
This book narrows the focus to several commonly formed candlestick reversal
patterns that you can learn to recognize in short order. You can start right away
utilizing candlesticks to improve your chart analysis skills, and, of course, to in-
crease your profitability.
You will find this book very helpful if you desire to:
• Learn candlestick charting but don’t want to get overwhelmed.
• Learn to recognize high probability trade setups.
• Improve your swing trading techniques. Candlestick charting is a stel-
lar tool for fine-tuning swing trading strategies.
• Learn how to improve the timing of your entries and exits.
• Develop a knowledge base in classic Western technical analysis and un-
derstand the role of candlesticks within that broader framework.
Every effort was made to produce this important learning resource in a
user-friendly format. The chapters are organized in a manner in which they build
one upon the other. The content is written in layman’s terms with a level of
detail that ensures understanding by beginning and intermediate-level traders.
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