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Steve Nisons Candlesticks Re-Ignited Advanced Workshop:Advanced Western and Trade Management with Candlesticks
Volume 4 of the Nison Educational Series
www.candlecharts.com
AdvancedWestern
Technical Tools
Founder and President: Candlecharts.com 212
CandlestickCharting
Techniques
WesternCharting
Tools
Trade Management
213
214
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Steve Nisons Candlesticks Re-Ignited Advanced Workshop:Advanced Western and Trade Management with Candlesticks
Volume 4 of the Nison Educational Series
2
Enhance winning %s
Using candles fornew trade
Price targets
Western Technicals
215
A candle signal is normally not asufficient reason for a new trade
216
www.candlecharts.com
East + West Confirmation
Where a candle
signal confirms a
Western technical
signal
217
3
Steve Nisons Candlesticks Re-Ignited Advanced Workshop:Advanced Western and Trade Management with Candlesticks
Volume 4 of the Nison Educational Series
www.candlecharts.com
East + West = Greater Winning %
218
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Candles plus..
219
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Candles plus Bollinger Bands
220
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Steve Nisons Candlesticks Re-Ignited Advanced Workshop:Advanced Western and Trade Management with Candlesticks
Volume 4 of the Nison Educational Series
www.candlecharts.com
Convergence of Clues
Open Interest
221
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East and West = Higher Confidence
222
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Candles look good- but what about m.a?
223
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Steve Nisons Candlesticks Re-Ignited Advanced Workshop:Advanced Western and Trade Management with Candlesticks
Volume 4 of the Nison Educational Series
www.candlecharts.com
Crack and Snap with Volume
The arrow points to a Snap and Crack. Whatdoes volume do to increase the likelihood of thistechnique working?
224
www.candlecharts.comFounder and President: Candlecharts.com 225
www.candlecharts.com 226
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Steve Nisons Candlesticks Re-Ignited Advanced Workshop:Advanced Western and Trade Management with Candlesticks
Volume 4 of the Nison Educational Series
www.candlecharts.com
Candles and the ADX:The Perfect Fit
Candles and the ADX:The Perfect Fit
227
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Stands for Average Directional Indicator
Shows how strongly a market is trending
Does not show direction of trend
228
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Strong ADX withprices in up trend. Strong ADX with
prices in down trend.
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Steve Nisons Candlesticks Re-Ignited Advanced Workshop:Advanced Western and Trade Management with Candlesticks
Volume 4 of the Nison Educational Series
www.candlecharts.com
1
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Some technical indicators, such as moving averages,momentum trading, work better in strongly trendingmarkets.
Some technical indicators, such as oscillators, workbetter in non trending markets.
Traders check ADX to see if the technical indicatorthey use is in right trend environment
231
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Use only on daily charts except for FX
Use only for entries
Lagging indicator
Slow to recognize a new trend
232
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Steve Nisons Candlesticks Re-Ignited Advanced Workshop:Advanced Western and Trade Management with Candlesticks
Volume 4 of the Nison Educational Series
www.candlecharts.com
Steve-
Apple has recently gone from 120 to 150 and the ADX on a daily basis
has not moved up. This is surprising. Comments? - Pete
233
Common mistake- lookingat ADX level.
Slope is the key
Slope=change in ADX fromyesterday to today.(todays ADX level-yesterdaysADX level)
Greater the slope, strongerthe trend
234
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-.31
ADX at 20.64.What do we need todetermine the slopeon this day?
ADX at 20.96
Slope = 20.64-20.96 = -.32
ADX 22.04
ADX 24.11
Slope = 24.11-22.04 =+2.07
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Steve Nisons Candlesticks Re-Ignited Advanced Workshop:Advanced Western and Trade Management with Candlesticks
Volume 4 of the Nison Educational Series
www.candlecharts.com
14 PeriodADX slopeincreasing.5 or more
ADX:22.38
ADX:20.30
ADX:26.03
Slope = +2.08
What is the slope?Strong uptrend?
ADX:27.56
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Minimum:14 PeriodADX slope+.25 orless
ADX:18.57
ADX:18.26
-.31
Strict: 14PeriodADX slopedecreasing
237
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Chuck@smartstops.net
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Steve Nisons Candlesticks Re-Ignited Advanced Workshop:Advanced Western and Trade Management with Candlesticks
Volume 4 of the Nison Educational Series
Candles and ADX - The Perfect Fit
Reversal candleshelp pick top andbottoms.
Increase % by notgoing againststrong trends.
239
www.candlecharts.com 240
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Minimum:14 PeriodADX slope+.25 orless
Strict: 14PeriodADX slopedecreasing
Do we have to measure theADX slope on this hammer?
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Steve Nisons Candlesticks Re-Ignited Advanced Workshop:Advanced Western and Trade Management with Candlesticks
Volume 4 of the Nison Educational Series
www.candlecharts.com
Minimum:14 PeriodADX slope.25 or less
Strict: 14PeriodADX slopedecreasing
-.10-.40
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Bull shadows on descent. Butbased on ADX which of these ismore likely a turn?
ADX slopes2.24, 2.53, 2.67
Why didnt Iput ADXnumbers forthese?
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ADX : 27.98
What candle patterns are atthe dashed arrows?
What is the ADX telling us?
ADX : 30.38
ADX : 31.80
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Steve Nisons Candlesticks Re-Ignited Advanced Workshop:Advanced Western and Trade Management with Candlesticks
Volume 4 of the Nison Educational Series
www.candlecharts.com
ADX:18.57
ADX:18.26
-.31
Strict: 14PeriodADX slopedecreasing
+.95
Minimum:14 PeriodADX slope+.25 orless
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Slope +.97
246
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FOR BEAR CANDLEREVERSAL SIGNALS
Step 1 get candlesignal
Step 2 ADX showsuptrend easing orno trend:
ADX slopeincreases byless than .25,and better ifslope isnegative
ADX:42.85and 41.02so slope is-1.83
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Steve Nisons Candlesticks Re-Ignited Advanced Workshop:Advanced Western and Trade Management with Candlesticks
Volume 4 of the Nison Educational Series
www.candlecharts.com
FOR BULL CANDLEREVERSAL SIGNALS
Step 1 get candlesignal
Step 2 ADX showsdowntrend easing or notrend:
ADX slope increasesby less than .25, andbetter if slope isnegative
ADX:1-31.972-32.673-32.484-32.455-32.536-30.23
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2
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5
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www.candlecharts.comFounder and President: Candlecharts.com 249
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Gravestone doji at resistance
After the gravestonewhere is a potentialtarget?
250
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Steve Nisons Candlesticks Re-Ignited Advanced Workshop:Advanced Western and Trade Management with Candlesticks
Volume 4 of the Nison Educational Series
www.candlecharts.com
Candles for reversals and Western for targets
Bearish engulfingpattern at top of bullchannel
target
251
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Firstleg
target
Swing TargetSwing Target
252
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East and West
Doji as signal to exit
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Steve Nisons Candlesticks Re-Ignited Advanced Workshop:Advanced Western and Trade Management with Candlesticks
Volume 4 of the Nison Educational Series
www.candlecharts.com
Becoming a Confident Trader
254
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Head and ShouldersHead and Shoulders
Neckline
Left ShoulderRightShoulder
Head
Head and Shoulders Top
Sellsignal
255
Three Buddha Pattern
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Steve Nisons Candlesticks Re-Ignited Advanced Workshop:Advanced Western and Trade Management with Candlesticks
Volume 4 of the Nison Educational Series
www.candlecharts.com
We got the reversal here withcandles .
Compared to here witha classic western signal
Why we are here!
257
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1
2 3
Old supportbecomes..
New resistance
How Education Saves You $$$$
1- Bear Harami2- Dark Cloud Cover3- Bearish Engulfing Pattern
258
neckline Interview
Head andShoulder top
TASC Interview - Jan. 24, 2003 S&P at 860
the heads and shoulders top on theS&P gives a target to near 775. A closeover 870 would void this. Hammer
1) Once the necklinessupport is broken, itshould becomeresistance.
2) To get a target with thehead and shoulders topwe measure from the topof the head to theneckline.
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Steve Nisons Candlesticks Re-Ignited Advanced Workshop:Advanced Western and Trade Management with Candlesticks
Volume 4 of the Nison Educational Series
STEVES FAVORITEMEASURING TACTIC
260
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Box Range BreakoutBox Range Breakout
261
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Box range breakout
Harami withtarget bottom ofbox
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Steve Nisons Candlesticks Re-Ignited Advanced Workshop:Advanced Western and Trade Management with Candlesticks
Volume 4 of the Nison Educational Series
www.candlecharts.com
Box range Breakouts
263
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East & West = Profits
264
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Box range Breakout/ momentum trading
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Steve Nisons Candlesticks Re-Ignited Advanced Workshop:Advanced Western and Trade Management with Candlesticks
Volume 4 of the Nison Educational Series
www.candlecharts.com 266
www.candlecharts.com
Scenario1
Scenario2
The Tools of the West withthe Light of the Candles
The Tools of the West withthe Light of the Candles
267
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The Nison Candlestick ScreenerThe Nison Candlestick Screener
Using candles at support or resistancefor the high probability trades
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Steve Nisons Candlesticks Re-Ignited Advanced Workshop:Advanced Western and Trade Management with Candlesticks
Volume 4 of the Nison Educational Series
www.candlecharts.com
Question 1- Is the market at support or resistance?
Question 2- Are there any reversal candles?
Question 1- Is the market at support or resistance?
Question 2- Are there any reversal candles?
Two simple questionsTwo simple questions
The Nison Candlestick Screener
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The Nison Candlestick Screener
270
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The Nison Candlestick Screener
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Steve Nisons Candlesticks Re-Ignited Advanced Workshop:Advanced Western and Trade Management with Candlesticks
Volume 4 of the Nison Educational Series
www.candlecharts.com
1) Whos in control duringthis ascent?
2) What is thiscandle linehinting?
The Nison Candlestick Screener
272
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Major resistance 2.00-2.01
The Nison Candlestick Screener
273
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Long term resistance zone
1) Is the at resistance?
2) Are there any candle signalsshowing hesitation?
How education saves you $$$$
274
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Steve Nisons Candlesticks Re-Ignited Advanced Workshop:Advanced Western and Trade Management with Candlesticks
Volume 4 of the Nison Educational Series
www.candlecharts.com
The Value of Owning the Knowledge
Long term resistancezone
275
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The Value of Owning the Knowledge
276
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The Nison Candlestick Screener
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Steve Nisons Candlesticks Re-Ignited Advanced Workshop:Advanced Western and Trade Management with Candlesticks
Volume 4 of the Nison Educational Series
www.candlecharts.com
Near support?Any reversal signals yet?
The Nison Candlestick Screener
278
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The Nison Candlestick Screener
279
Market refreshed
The Nison Candlestick Screener
Near resistance?Any reversal signals yet?
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Steve Nisons Candlesticks Re-Ignited Advanced Workshop:Advanced Western and Trade Management with Candlesticks
Volume 4 of the Nison Educational Series
Using Measured Moves including:
Box range
Head and Shoulders
Swing Targets
The Candlestick Screener
281
www.candlecharts.comFounder and President: Candlecharts.com 282
www.candlecharts.com
What are Sectors?
Technically analyze sectors like any other market
Cant trade sectors so why are sectors important to traders?
283
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Steve Nisons Candlesticks Re-Ignited Advanced Workshop:Advanced Western and Trade Management with Candlesticks
Volume 4 of the Nison Educational Series
www.candlecharts.com
Candles and Sectors
284
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Why are Sectors important
Sectors account for 37-60%of an individual stocks performance
This means you need to know what the sector is doing!285
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Bottom Up: Stock to Sector
Top Down : Sector to Stocks
Bottom Up: Stock to Sector
Top Down : Sector to Stocks
How can we use Sectors?
286
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Steve Nisons Candlesticks Re-Ignited Advanced Workshop:Advanced Western and Trade Management with Candlesticks
Volume 4 of the Nison Educational Series
www.candlecharts.com
Check the stocks sector
Try to place new trades in direction of sector outlook
If must go counter trend to sector, use to take profits
Check the stocks sector
Try to place new trades in direction of sector outlook
If must go counter trend to sector, use to take profits
287
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AMGN - Aug 17 Biotech Sector- Aug 17
Although fallingwindow what is its sectorstrongly hinting?
Bottom Up Sector Analysis
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Steve Nisons Candlesticks Re-Ignited Advanced Workshop:Advanced Western and Trade Management with Candlesticks
Volume 4 of the Nison Educational Series
www.candlecharts.com
Bottom Up Sector Analysis
290
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Biotech Sector
AMGN Sept. 11Buy ?
Bottom Up Sector Analysis
291
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Sept.11
Buy
Bottom Up Sector Analysis
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Steve Nisons Candlesticks Re-Ignited Advanced Workshop:Advanced Western and Trade Management with Candlesticks
Volume 4 of the Nison Educational Series
www.candlecharts.com 293
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Setting up scanning pages forNison Sector Analyses
294
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Scanning with Nison Candle Sector Analyses
STEP 1 Scan Sectors
Aug. 16
Internets Banks Biotech
Gold- Silver Semis Retail
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Steve Nisons Candlesticks Re-Ignited Advanced Workshop:Advanced Western and Trade Management with Candlesticks
Volume 4 of the Nison Educational Series
www.candlecharts.com
Scanning with Nison Candle Sector Analyses
STEP 2 Scan Component Stocks in Chosen Sector(s): Internets for this example
Aug. 16
296
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Scanning with Nison Candle Sector Analyses
STEP 3 Do Analysis on Stock for Potential Trade
Aug. 16
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Scanning with Nison Candle Sector Analyses
Aug. 16
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Steve Nisons Candlesticks Re-Ignited Advanced Workshop:Advanced Western and Trade Management with Candlesticks
Volume 4 of the Nison Educational Series
www.candlecharts.com
ETFs
Track All Major Sectors and Indices Track All Major Sectors and Indices
Can Trade ETFs Can Trade ETFs
Popularity/Liquidity Popularity/Liquidity
Exchange Traded FundsExchange Traded Funds
299
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Golden and Dead Crosses
Dark cloud confirming resistance
Hammers
Bull sashpatterns
Analyze and Trade ETFs like any other market
300
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Windows and ETFs
301
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Steve Nisons Candlesticks Re-Ignited Advanced Workshop:Advanced Western and Trade Management with Candlesticks
Volume 4 of the Nison Educational Series
Sectors Important for stocks
Can analyze with candles
Bottom up trading
Top down to filter Scan for best sectors
Find best stocks in those sectors
Analyze those stocks
ETFs Ability to trade sectors
Instant diversification
302
www.candlecharts.comFounder and President: Candlecharts.com 303
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3
Market Chameleon
Candles in Context
Risk-reward
Exit Strategies
Trade Management
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Steve Nisons Candlesticks Re-Ignited Advanced Workshop:Advanced Western and Trade Management with Candlesticks
Volume 4 of the Nison Educational Series
www.candlecharts.com
Being a Market Chameleon:As market conditions change,
adjust your market stance.
Adapting to the Market
305
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Adapting to the Market
Looks good
anythingdifferent?
306
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Adapting to the Market
Target
307
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Steve Nisons Candlesticks Re-Ignited Advanced Workshop:Advanced Western and Trade Management with Candlesticks
Volume 4 of the Nison Educational Series
www.candlecharts.com
Adapting to the Market
Sell here
308
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Adapting to the Market
309
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Adapting to the Market
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Steve Nisons Candlesticks Re-Ignited Advanced Workshop:Advanced Western and Trade Management with Candlesticks
Volume 4 of the Nison Educational Series
www.candlecharts.com
Adapting to the market
Wheressupport?
Wheressupportnow?
311
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Become a Market Chameleon
BearStearnsCollapse
312
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Candles in Context
Analyzing candlesignals within thecontext ofsurroundingtechnical picture
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Steve Nisons Candlesticks Re-Ignited Advanced Workshop:Advanced Western and Trade Management with Candlesticks
Volume 4 of the Nison Educational Series
www.candlecharts.com
Misinformation can cost you $$$
?
314
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Same Signal- but how different the strategy!
315
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Which is a Bettertrading signal?
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Steve Nisons Candlesticks Re-Ignited Advanced Workshop:Advanced Western and Trade Management with Candlesticks
Volume 4 of the Nison Educational Series
www.candlecharts.com
Dark Cloud Cover
BearishEngulfingPattern
Candles in Context
317
Which is a bettertrading signal?
Hammer Morning Star318
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Hammer
Morning Star
Candles in Context
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Steve Nisons Candlesticks Re-Ignited Advanced Workshop:Advanced Western and Trade Management with Candlesticks
Volume 4 of the Nison Educational Series
www.candlecharts.com
1. What is your price risk?
2. What is your target?
Do you have agood
risk-reward?
Always Check Risk Reward
320
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Risk/Reward
321
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Waiting for time to ripenClassic bearishengulfing pattern:But what aboutrisk/reward aspect?
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Steve Nisons Candlesticks Re-Ignited Advanced Workshop:Advanced Western and Trade Management with Candlesticks
Volume 4 of the Nison Educational Series
Trade Management Essentials Adapting to the Market
Candles in Context
Importance of risk/reward
323
Founder and President: Candlecharts.com 324
www.candlecharts.com
Protectingyour Assets
325
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Steve Nisons Candlesticks Re-Ignited Advanced Workshop:Advanced Western and Trade Management with Candlesticks
Volume 4 of the Nison Educational Series
Slide 115
The race is not always to theswiftest, but to those who keeprunning.
326
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Protective Stops keep you in the game!
Lookspromising at
the whitecandles
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Steve Nisons Candlesticks Re-Ignited Advanced Workshop:Advanced Western and Trade Management with Candlesticks
Volume 4 of the Nison Educational Series
www.candlecharts.com
Hammer
Closed under support
How Education Saves you $$$$
329
www.candlecharts.com
Hammer
How Education Saves you $$$$
330
Exit Strategies
Protective Stops
Time Stops
Trailing Stops
Steve Nisons Candlecharts.com 331
41
Steve Nisons Candlesticks Re-Ignited Advanced Workshop:Advanced Western and Trade Management with Candlesticks
Volume 4 of the Nison Educational Series
www.candlecharts.com 332
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If the market does not actas expected within aboutfive sessions then considerexiting
333
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Dont Stay Around
Hammer and Bull Engulf
What are you doing hangingaround! Youre wastingprecious resources.
Chart courtesy of Genesis FT
334
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Steve Nisons Candlesticks Re-Ignited Advanced Workshop:Advanced Western and Trade Management with Candlesticks
Volume 4 of the Nison Educational Series
www.candlecharts.com
Youre Wasting Resources
335
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Trailing Stops
As the market movesin your direction stop is adjusted tohelp ride the trend.
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Steve Nisons Candlesticks Re-Ignited Advanced Workshop:Advanced Western and Trade Management with Candlesticks
Volume 4 of the Nison Educational Series
www.candlecharts.com
Golden and Dead CrossesCompares two moving averages
GOLDEN CROSS: shorter crosses above longer DEAD CROSS: shorter crosses under longer
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Answer: 3 and 12 day
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Steve Nisons Candlesticks Re-Ignited Advanced Workshop:Advanced Western and Trade Management with Candlesticks
Volume 4 of the Nison Educational Series
www.candlecharts.com
Trailing stops - letting the profits run
Fallingwindow
I usually exit, itcorrects somewhatbut then continuesto go in the originaldirection after that.
ShootingStar
You sold at shooting star orfalling window. A rally from abull harami gets you nervousand you exit. But youre still
playing with the marketsmoney- so another option:
trailing stop.
341
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Falling window
ShootingStar
Where you got nervous
Trailing stops - letting the profits run
342
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Letting Profits Run
Buy and setprotective stop
Shooting star
Could take someor all profits here
Or use dead crossas your trailingstop and wouldthus exit here
343
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Steve Nisons Candlesticks Re-Ignited Advanced Workshop:Advanced Western and Trade Management with Candlesticks
Volume 4 of the Nison Educational Series
www.candlecharts.com
Trailing Stops to let profits run
Buy and setprotective stop
Potential Target
Now at target-Doji warns of
caution. But youwant to letprofits run.
344
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Trailing Stops to let profits run
doji
345
Exit Strategies
Protective Stops
Time Stops
Trailing Stops
346
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Steve Nisons Candlesticks Re-Ignited Advanced Workshop:Advanced Western and Trade Management with Candlesticks
Volume 4 of the Nison Educational Series
Trading Journal(setting up the Trade)
Goal: Keeping emotionsout of your trading
Date, market, $ amount committed Why did you do the trade Entry Price Risk Initial Target Exit Price Analyze Trade
Print out (or cut and paste) chart and make notesWhat did you do right/wrong
Date, market, $ amount committed Why did you do the trade Entry Price Risk Initial Target Exit Price Analyze Trade
Print out (or cut and paste) chart and make notesWhat did you do right/wrong
From Toni Turners Book- Short Term Trading in the New Stock Market - www.toniturner.com
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Trading Journal - Setting up the Trade
Entry Price
Risk
Initial Target
Why did you do the trade?
349
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Steve Nisons Candlesticks Re-Ignited Advanced Workshop:Advanced Western and Trade Management with Candlesticks
Volume 4 of the Nison Educational Series
www.candlecharts.com
Trading Journal - Analyzing the Trade
Entry Price
Risk
Initial Target
Why did you do the trade?
Exit Price
Analyze the trade
350
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Entry Price
Risk
Initial Target
Why did you do the trade?
Trading Journal - Setting up the Trade
Support from a few months ago
351
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Trading Journal - Analyzing the Trade
Entry Price
Risk
Initial Target
Why did you do the trade
Exit Price?
Analyze the trade
352
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Steve Nisons Candlesticks Re-Ignited Advanced Workshop:Advanced Western and Trade Management with Candlesticks
Volume 4 of the Nison Educational Series
www.candlecharts.com
Trading Journal - Analyzing the Trade
Entry Price
Risk
Initial Target
Why did you do the trade
Exit Price
Analyze the trade
353
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Putting it all Together
Trading ChecklistTrading Checklist
Have VALID Candle signal (if not sure-confirm with Nison candlestickrecognition software)
Does candle confirm Western signal (i.e.ADX, support/resistance, volume, or anyof your favorites)
Stock traders check sector
Determine risk/reward (remember manyof the candle signals can be used as aprotective stop)
Monitor trade (i.e. time or trailing stops,change in technical picture, etc)
Use Trade Journal
355
Recommended