the language of candle sticks

"candlesticks give greatest emphasis on the opening and closing prices of trading range."

my view = absolutely. No other technical does that.

I once wanted to do my kind of PhD in candles but by that time I was already committed to RSI and that needed commitment.I had realised that there is much more to candles than just cramming shooting and morning stars etc.

I've seen whole world just doing that only. None has gone beyond the already shared known patterns. None has tried to actually learn the "language" of candles.

I strongly believe that candle sticks are the symbolic videography of any moving data. We have to get so used to candle sticks like the ancient Japanese that we can extrapolate the candle train.

Learning just a dozen or so patterns is like learning just Sayonara's and Asta la Vista's and not the actual language, thus missing the whole message and getting it often wrong and paying the price.

5 candles of profit

dear buddies,

those who love candle sticks and want a power technique for trend trading, i strongly suggest studying
CHAOS THEORY by Bill Williams

he uses a combination of 5 consecutive candles to find "fractals" which, if broken or crossed, may indicate the start of a trend

subject to the position of price and fractals wrt "jaws" "teeth" and "lips" of what he calls "alligator" setting of sma 13,8,5.

it seems complicated but, believe me, is easy if u r determined to learn it.

use it in conjunction with what u already know and see the magic!

i am giving below a few links of the same.

you can also check youtube forexplanation of the same in bills' own voice in his recorded lectures.

http://codebase.mql4.com/4488

http://www.alpari.co.uk/en/market-analysis-guide/chaos-theory/alligator-and-gator.html

http://mises.org/books/chaostheory.pdf

for trades and nifty levels on the basis of this "chaos theory", pl let me know.

Js (09418037474)
(niftyshots.blogspot)

Candles with a single wick never lie (Understanding Candlesticks-III)

A Candlestick may have 0 or 1 or 2 wicks.

The candle with just 1 wick never lies. The one with 0 or 2 wicks needs help to reveal the truth.

Hammer (white candle with only lower wick) signals a bullish pattern after small pullback. A hammer resembles 'higher low' formation.

Shooting star (white candle with only upper wick) signals a bullish pressure. A shooting star also resembles 'higher low' formation.

Hanging man (Dark candle with only lower wick) signals a bearish pressure. A Hanging man resembles 'lower high' formation.

Inverted hammer (Dark candle with only upper wick) sugnals a bearish pressure after small pullup. An inverted hammer also resembles a 'lower high' formation.

Also, a double wick candle (like Spinning Tops, Longlegged Doji etc.) can indicate any of the bearish or bullish movement depending upon whether the closing price was approached from up or from down.

You can check this from the price graph. If the closing price was touched from below, it can be a bearish signal. If the closing price was touched from above, it can be a bullish signal.

Dragonfly and Gravestone Doji indicate trend reversals.

Also, A Morubozu (a candlestick with no wick) can indicate one of the following 4 situations:-

1)Kick starting a new trend

2)Strong resumption of the trend after consolidation

3)Sudden momentum gain in the trend

4)Overdoing at extremes

Check out to understand the next event!

You can take 5 minute interval for Day Trading and 1-day interval for Swing Trading.

A 5-minute candle can "throw light" atleast for the next 2 minutes!

A 1-day candle can "throw light" alteast for the next 1-3 hours!

A 1-week candle can "throw light" atleast for the next 1-3 days!

Trade confidently with candles. But keep your eyes open for the next candle.

A 1-week candle can make the day comfortable.

A 1-day candle can make the hour comfortable.

A 1-hour candle can make the minutes comfortable.

You can get candle charts on many sites including google finance site where near live feeds are there.

Also, even if you don't get a candle chart, you can draw one yourself. It is the only indicator which is so easy to make.

I myself make candle chart for last 5-days to anticipate the entire next trading day and 1-day candle to anticipate the first 1-2 hours of the next trading day. I don't day trade. But I do BTST with Candlestick estimation and it works!!!

Start, Pause, Stop (Understanding Candlesticks-II)

How is the start or pause or end of a trend communicated in candlestick charts?

A long candle is seen!

When the candle appears at rsi extremes, it generally signals the end or start,

When it appears near mid of rsi, it signals the pause.

(Keep duration as '2 minutes' for Day Trading and 'Daily' for Swing/Positional Trading.)

Mr.Morubozu and his family of Talking Candles

This is the family photo of Mr & Morubozu.

One day they went for a picnic to the stock exchange.

When they came back they all wrote their version of what they saw in the exchange!

Here is a spy's account of what each one of them wrote in his/her diary.

Mrs. Morubozu (Tall, Fair and Beautiful)

What she wrote " There was a considerable reason for the price to go up during the day."

Mr. Morubozu (Tall, Dark and Handsome)

"There was a considerable reason for the price to go down during the day."

Mr. Hammer (Eldest Son)

"There was Strong buying at lower levels, Sell-off was not sustainable, Mood is optimistic."

Mr. Hanging Man (Second Son)

"There was Buying at lower levels, but the mood is the one of doubt."

Mr. Inverted Hammer (Third Son)

" Saw selling at higher levels, mood was not so good."

Mr. Shooting Star (Youngest Son)

"Saw profit booking at higher levels, but the mood is good."

Ms. Long legged Doji (Eldest Daughter)

"Saw equal fight between Bulls & Bears which ended in a draw after ups & downs, both are injured but Bulls are tired as well"

Ms. Dragonfly Doji (Second Daughter)

"Bulls in no mood to surrender. They beat the charging Bears. But Bulls are badly injured"

Ms. Gravestone Doji (Youngest Daughter)

"Bears in no mood to surrender. They beat the charging Bulls. But Bears are badly injured"

Spinning Top (Fair) (First Servant)

Spinning Top (Dark) (Second Servant)

Both of the servants were clueless.

They wrote

"All izz not well. Nobody won. Tomorrow will decide!"