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The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 1
With Steve Nison, CMTPresident: Candlecharts.com
& the first to reveal candlesticks to theWestern world
CandlestickCharting
Techniques
Candles +WesternCharting
Tools
Candles for Trade Management
1
• Early reversals
• “Safety First” Trading
• Quickly reading themarket’s message
Candlestick Charts
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 2
2
• Enhance winning %s
• Price targets
Candles withWestern
Technicals
3
• Protective Stops
• Price Targets
• Risk/Reward
• Prevailing Trend
• If … Then Principle
•Market Chameleon
Candles for TradeManagement
CandlestickCharting
Techniques
Candles +WesternCharting
Tools
Candles for Trade Management
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 3
open close
open
RealBody
high
low
Shadow
Real Bodies / Shadows
close
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The longer the realbody the strongerthe momentum.
The relative sizeand position of theshadow displaysthe extent of pricerejection.
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 4
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Who’s in control?
“The Real Body is the Essence of the Price Movement”
• The Doji• The High Wave Candle
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Where open and close are the same(or nearly the same)
Who’s in control?
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 5
These have the sameclosing prices, but what arethe candles telling us?
CANDLES REVEAL THE FORCE BEHIND THE MOVE:HOW DOES THIS KNOWLEDGE IMPROVE YOUR TRADING?
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Doji
www.activeinvestorblueprint.com
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 6
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Candles and Momentum Trading
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Session with long upper and lowershadows compared to real body(which is in the middle of the range)
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High Wave Candle
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 7
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High wave Doji
The
• The Hammer• The Inverted Hammer• Bull Counter Attack• Piercing Pattern• Bullish Engulfing Pattern• Bull Harami• Bull Separating Line• Tweezers Bottom• Rising Window• Morning Star• Rising Three Methods• Three Advancing White Soldiers
Black or white candle with long lowershadow (2x or more) compared to realbody.
www.candlecharts.com
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 8
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Candles for getting in early on a new trend
Extra $25 pershare profit
Extra $30 pershare profit
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Hammers
Scenario 1 – buy at hammerMkt @ $395: 400 call @ $11.30
Exit at doji ( red arrow 13 daysafter hammer) mkt @ 447: 400call @ $47.50 (320 % return)
Scenario 2 – buy based on MACDMkt @ $418 : 420 call @ $13.45
Exit at doji (5 days later) mkt @447: 420 call @ $31.20 (132%return)
Result: Nison candlesticksgenerated over 2x the profit!
Nison Candlestick strategies for long calls
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 9
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Nison Power Concept
Is it a valid Nison candle?
Not hammers!
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Upside down hammer and market ina downtrend.
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The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 10
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Negative Selection
Don’t sell short
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confirmed
Inverted Hammer with candle confirmation
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Black real body followed by a white realbody that gaps lower on the open andthen closes at, or near, black candleclose.
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 11
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Bull Counter Attack
White real body that wraps aroundprior session black real body or doji.
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Bullish Engulfing Patterns
www.activeinvestorblueprint.com
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 12
Bullish Engulfing Pattern
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This is interesting: I recently purchased atechnical analysis package from a “WELLKNOWN” technical analysis guru. Duringhis charting presentation he made severalreferences to candlestick patterns, and eachreferences that he made was absolutelywrong! …During a strong uptrend, he calleda large white real body after a small blackreal body a bullish engulfing pattern. If Ihadn’t bought and studied your education , Iwould never would have known that andwould have assumed that he was right. Andcould have lost a lot of money!
Thanks again for your great work!
-Carl
Nison Candlesticks for FXNison Candlesticks for FX
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 13
closeopen
Criteria:• White real body wraps aroundpreceding black real body
• Market in down trend
•Implication: Market bottoming out
Non FX Bullish Engulfing Pattern
close
open
Criteria:• White real body wraps aroundpreceding black real body
• Market in down trend
•Implication: Market bottoming out
FX (or intraday) Bullish Engulfing Pattern
Small real body inside an unusuallylong black real body.
www.candlecharts.com
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 14
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Bullish Harami
White candle that opens lower and thencloses more than halfway into priorblack real body.
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Piercing Pattern Confirms Support
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 15
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Black candle followed by white candlethat opens within black real body andcloses over prior open.
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Bull Sash Pattern
Bull Sash
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Black candle followed by white candlethat opens at (or above) prior open. Thencloses over black candle open.
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 16
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Bull Separating line
While at resistancethis is a new high
close for move
TWEEZERS BOTTOMTWEEZERS BOTTOM
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Two candles that have the same lows.First candle large black.
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Tweezers and Harami
The Candlestick EXPRESS Class with Steve Nison
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Same as a gap in Western technicals. Thecurrent session’s low is higher than theprior session’s high.
A rising window issupport
Corrections stop at the window
SupportZone
How education saves you money
Bearish engulfingpattern, but you mustnot sell here. Why?
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 18
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Large rising window
Bottom of risingwindow as themajor support
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Small Window
2 cents
First candle long black, second candlesmall real body, third candle is whitethat gets deeply into first real body.
white orblack
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The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 19
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Morning Star
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How Education helps MAKE you money
Morning star variation
Entered themarket here
RISING THREE METHODS
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A series of small candles inside therange of a tall white candle. The lastcandle is another tall white.
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 20
RISING THREE METHODS
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Three consecutive white candles,each with a higher close.
The
• The Shooting Star• The Hanging Man• Bear Counter Attack• Dark Cloud Cover• Bearish Engulfing Pattern• Bear Harami• Bear Separating Line• Tweezers Top• Falling Window• Evening Star• Falling Three Methods• Three Black Crows
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 21
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Black or white candle with long uppershadow (2x or more) compared to real body.
www.candlecharts.com
“A crack has entered the market”
If I had only known this! Icould have made a quick 25%
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 22
What iswrong withthis so called“shootingstar?”
Hint: look at upper shadow
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Same shape as a hammer, butmarket in an uptrend.
Hammer and Hanging Man LinesHammer and Hanging Man Lines
Hammer
Hanging Man
bottom reversal
top reversal
whiteorblack
whiteorblack
The difference between these is the preceding trend
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 23
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Hanging Man
confirmation
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White real body followed by a black realbody that gaps higher on the open andthen closes at, or near, white candleclose.
www.candlecharts.com
Bear Counter Attack
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 24
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Black real body wraps around priorsession white real body or doji.
Bullish Bearish
Dual Bearish Engulfing Patterns
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 25
www.candlecharts.com
How Education MAKES you money
These areNOT bearishengulfingpatterns!
This is a bullishengulfingpattern
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Black real body wraps around priorsession white real body or doji.
close open
FX or Intraday
Bearish Engulfing Pattern
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 26
Small real body inside an unusuallylong white real body.
Harami
Not a harami pattern
Bearish Harami
www.candlecharts.com
Black candle that opens higher and thencloses more than halfway into priorwhite real body.
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 27
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Dark Cloud Cover
Bulls have beenconstrained
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White candle followed by black candlethat opens within white real body andcloses under prior open.
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Bull and Bear Sash
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 28
www.candlecharts.com
White candle followed by black candlethat opens at (or above) prior open. Thencloses under black candle open.
www.candlecharts.com
Bear Separating Line
TWEEZERS TOPTWEEZERS TOP
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Two candles that have the same highs.First candle large white.
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 29
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Tweezers top
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Tweezers Top
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Same as a gap in Western technicals. Thecurrent session’s high is under the priorsession’s low.
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 30
A falling window isresistance
Corrections stop at the window
ResistanceZone
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Falling window with extra confirmation
The small real bodieshelped confirm theimportance of thefalling window’sresistance
Falling window
white orblack
First candle long white, second candlesmall real body, and third candle isblack that gets deeply into first realbody.
www.candlecharts.com
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 31
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Evening Star as resistance
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Evening Star
Cramer issues a buy
On it’s way to $2!
Falling Three Methods
A series of small candles inside therange of a long black candle. The lastcandle is another long black.
www.candlecharts.com
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 32
FALLING THREE METHODS
Why about this fallingthree gives you extrabearish confidence?
www.candlecharts.com
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Three consecutive black candles,each with a lower close.
Three Black Crows
18 25 2
July
9 16 23 30
August
6 13 20 27 4
September
10 24
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50PULTE CORP (44.8600, 45.6600, 43.7600, 43.9000, -0.95000)
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 33
NCS Special - $400 off coupon code (NCS400) + free upgrade to lifetime access forthe same price as annual: www.nisoncandlescanner.com/special
NOTE: this is a limited time offer
To upgrade for lifetime access for $49 (if you haven’t done so already) :www.candlechartsacademy.com
IMPORTANT- you must log into your account for access to this recording
Contact [email protected]
With Steve Nison, CMTPresident: Candlecharts.com
& the first to reveal candlesticks to theWestern world
CandlestickCharting
Techniques
Candlesticks +Western
Indicators
Candlesticks + Trade Management
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 34
The Multiplier Effect
Where a Nison candle signal confirms another indicator
Congratulations –you bought at
support!
Congratulations?– you bought at
support?
www.candlecharts.com
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 35
SupportSupport
ResistanceResistance
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Trading Ultra Shorts
Support or resistance linesusing longer term charts (slide 1 of 2)
Long Term Chart
Long term support once broken becomes…. New resistance
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 36
And adding them to a Shorter Term Chart (slide 2 of 2)
Daily Chart
New resistance
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How Education SAVES you money
Snap
Crack
Target
Stop
Buy
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The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 37
Crack and Snap
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Crack and Snap
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Sell
Target
Stop
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The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 38
Falling off the Roof
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Bloomberg TV Interview - S&P at 996
hammer
DojiShooting star
Priorresistancebecomes newsupport
target
“Major support near 960.My upside target is 1160”
Examine how the market acts at supportor resistance
Two questions to ask:
1) Is the market at support orresistance?
2) Is there a of themarket losing force at that support orresistance?
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 39
Scenario1
Scenario2
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East + West = Higher Confidence
Do the oddsfavor a holding, orbreaking ofsupport?
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Does Candle Confirm a Key Level? 1 of 3
Is this a candle signalshowing the bears are losing force?If so then consider reversal trade
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 40
www.candlecharts.com
Does Candle Confirm a Key Level? 2 of 3
Is this a candle signalshowing the bears arelosing force?
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Does Candle Confirm a Key Level? 3 of 3
www.candlecharts.com
Momentum – Candle confirmation
can sell here
At support but any signs ofbears’ losing force?
What is another negative?
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 41
Candles and Trend lines
www.candlecharts.com
How Education Saves You Big $$$
Major resistance 2.00-2.01
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Long term resistance zone
How Education Saves You Big $$$
www.candlecharts.com
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 42
Candles and Volume
Light volumebreakout
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And then!
Candles and Volume
Higher volume on white candlecompared to black on this bullishengulfing pattern magnifies thelikelihood of a reversal
www.candlecharts.com
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Bull Harami
PotentialSellingclimax
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 43
Volume Confirming the Candle Signal
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Candles And Volume: High Volume Doji
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Bollinger Bands
•Developed by John Bollinger
•2 trading bands are placed around a movingaverage (typically a 20-day moving average)
•Bands are placed (typically) 2 standarddeviations above and below moving average
•Touch of upper band: overbought
•Touch of lower band: oversold
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 44
Doji in context
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The East and the West
⌫
⌫
The Candlesticks and then add ….
Bullish Engulfing Pattern
Bearish Engulfing Pattern
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 45
Traditional Western toolslike Bollinger Bands
Bullish Engulfing Pattern
Bearish Engulfing Pattern
Buy on thebullish engulfingand exit on thebearish engulfing
Head and ShouldersHead and Shoulders
Neckline
Left ShoulderRightShoulder
Head
Head and Shoulders Top
Sellsignal
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 46
Three Buddha Pattern
© Steve Nison’s Candlecharts.com
H&S neckline
Spotting the Early Reversals
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 47
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 neckline’ssupport is broken, itshould becomeresistance.
2) To get a target with thehead and shoulders topwe measure from the topof the head to theneckline.
www.candlecharts.com
Box ranges
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 48
East for reversal and West for target
Doji
Bearish engulfingpatterns
target
East & West = Profits
With Steve Nison, CMTPresident: Candlecharts.com
& the first to reveal candlesticks to theWestern world
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 49
CandlestickCharting
Techniques
Candlesticks +Western
Indicators
Candlesticks + Trade Management
www.candlecharts.com
Hammer as buy at $166.50
EDUCATION = CONFIDENCE = $UCCESS
Doji as exitat $169.30
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 50
www.candlecharts.com
CANDLES TO EXIT
Times to Exit
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Hammer as buy at $166.92
Shooting staras exit at $168.12
EDUCATION = CONFIDENCE = $UCCESS
Market Chameleon -adapt to changingmarket conditions
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 51
www.candlecharts.com
Market Chameleon
Buy on these back to back hammers.Original target is resistance at 1 asdefined by recent high and fallingwindow. With new resistance anddecline at area 1,that zone nowbecomes the area to take profits.
Fallingwindow
Buy
target
new target1
www.candlecharts.com
Adapting to the Market
Closed overWindow’sResistance
?
www.candlecharts.com
Adapting to the Market
target
Trend is down
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 52
www.candlecharts.com
The low of thebullish engulfingpattern assupport. Oncehammer is formed(at the arrow) wethen adjust oursupport
Adapting
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Hammer, but?
Candles in Context
“To know where you stand is asimportant as
candle pattern recognition.”
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 53
www.candlecharts.com157
Candles in ContextCandles in Context
1- Why is this not an ideal dark cloud cover?
2 – Why would you view it as bearish as a classic dark cloud cover?
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Candles in Context
This is ashooting star,but why notsell short?
Hint, look at July-early Aug. highs
Change of Polaritywhere formerresistancebecomes newsupport
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Candles in Context
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 54
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If…Then Rules
1) If the market does not act as forecasted thenexit the position
2)Initiate a position when the market justifiesyour potential trade (i.e. if near resistance, If themarket breaks above resistance, Then one canbuy.
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If….Then Rule (slide 1 of 2)
Head and shoulders top?
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If….Then Rule (slide 2 of 2)
Head and shoulders top NOT confirmed
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 55
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If….Then Rule
The bullish ascendingtriangle and the new highclose for the move stronglyhints that the market willbreak out. But resistanceheld.
Protective Stops
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 56
www.candlecharts.com
Candles as Support
Candlesticks for entering a new trade
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 57
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Candles as support and NCS
1) NCS (or you) find ahammer on this session
2) Set up an alert for whenthe market gets near thelow of the hammer to buy
Don’t try to catch a falling Dagger
First sign ofa bottom Extra Confirmation
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Testing candles’ support
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 58
Stops
www.candlecharts.comwww.candlecharts.com
PROTECTIVE STOPS
X
There are three reasons for considering a sell at line X:1) The top of the falling window2) The bearish engulfing pattern3) Line X is a doji
However, once the market breaks resistance, shorts shouldbe covered.
www.candlecharts.com
Shorted at 91.61
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 59
A candlestick line or patternrequires two criteria:
• The shape of the line or pattern• The preceding trend
What defines a trend?
• Higher highs and higher lows (or lower lows)
• Chart of higher degree
• Price above a moving average
• Dual moving averages – and use golden anddead crosses
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 60
Prevailing Trend
20 day m.a over50 day m.a and bothsloping up
Longer Term Trend
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Candles in Context:
Which is a better sale?
Scenario 1 Scenario 2
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 61
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Scenario 1 Scenario 2
Candles in Context:
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 62
Risk/Reward
Buy XYZ at 100
Support at 96
Price target (i.e resistance) at 108
Risking 4 looking to make 8 gives a 1:2 risk/reward
www.candlecharts.com
Hammer and Risk/Reward
Risk
reward
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 63
www.candlecharts.com
How Education saves you $$$
Risk
Potential
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Dark Cloud Cover and Risk/Reward
PatternCompleted
Here
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Risk-reward
1
2
Two hammers at 1 and 2. Butdue to falling windows onlyhammer 2 presents a buyingopportunity due to the r/r.
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 64
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Risk/Reward
Why I went long:
1) Bullish engulfing at support
2) Other spinning tops confirmingsupport
3) Trend line breakout of price
Was this a good trade that just didn'twork out or did I make a mistake injudgment that I can't see?
Thank you,Gary B
Why I went long:
1) Bullish engulfing at support
2) Other spinning tops confirmingsupport
3) Trend line breakout of price
Was this a good trade that just didn'twork out or did I make a mistake injudgment that I can't see?
Thank you,Gary B
1
2
34
5
Which are hammers and why?
Nison Chart Challenge 1
1. What pattern is highlighted?
2. When would you sell short based on this pattern?
Nison Chart Challenge 2
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 65
Market gaps down to $18 on open atarrow.
1) What are two reasons to considershorting on the open?
2) What is a potential concern?
3) What if the market gets over 18.50-what is that called?
4) If it got back over 18.50 and you areflat, what would you do and why?
5) Assume holds under 18.50 how canyou get a target? Hint - look atresistance made with two dojiOpens at $18
Nison Chart Challenge 3
Doji at A and B made new closesfor the move. Questions 1 and 2relate to these doji
1) If you were long, what would youdo with each of these doji andwhy?
2) If you were flat (no position)what would you do with each ofthese doji and why?
3) What pattern is in the rectangle?4) If you buy on the signal in
question 3 where is your stopand why?
5) Name three potential resistanceareas once the market moves upfrom the pattern at question 3.
6) Which of these three resistanceareas do you think would bemost important and why?
Doji A
Doji B
Nison Chart Challenge 4
2.What two candle signals formed here?3.Are these confirming something else?
1.Is this a piercing pattern?
4. Whatwould you dohere andwhy?
Nison Chart Challenge 5
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 66
1 2 3
What candle signals at 1 to 4 reflecttrouble near 1.9550?
4
Nison Chart Challenge 6
Nison Chart Challenge 7
1.Name 4 reasons to consider this a bottom2. Would you buy on the last candle signal? why or whynot3. If you didn’t buy when would you and why.
What 4 signals here hint of areversal? (purple lines are Bollinger
Bands)
Nison Chart Challenge 8
The Candlestick EXPRESS Class with Steve Nison
© candlecharts.com 67
Nison Chart Challenge #9
At the arrow:1) What candle pattern is
it?2) What western signal
does it also make(hint: look at prior
support area)?3) What is the target andwhy on this candle at thearrow?
Candlestick Express Class Quick Reference Checklist
Candlesticks:• Use real bodies to gauge market strength• A doji turns the trend from up or down to neutral• A close over a doji or a candle resistance can be used for a momentum trade• Hammers and shooting stars should have shadows 2x the read body• Candles are trend dependent• Candles for FX and intraday have subtle differences compared to non FX or daily charts
(NCS software does take this into account)
Candlesticks + Western tools• Candles + your favorite western tools = higher success• Use old multi-tested support for new resistance and vice versa• Failures to hold below support/ our resistance signals a reversal• If there is a candle signal showing trend is losing force by support/resistance there is a
higher likelihood of a reversal• Since candles do not give price targets, we need to use classic western price projections
Candlesticks for Managing your Trade or Investment• Use candles to not only enter, but to exit• Be a market chameleon by adjusting position to new technical developments• Never view candle signals in isolation, view within market context• If.. Then Rule. Wait for confirmation of your outlook• Protect capital by using protective stops (remember you can also use candles to set your
stops)• Be more aggressive when you are going in the direction of the longer term trend• Before doing a trade always remember to look it’s risk/reward
NCS Special - $400 off coupon code (NCS400) + free upgrade to lifetime access forthe same price as annual: www.nisoncandlescanner.com/special
NOTE: this is a limited time offer
To upgrade for lifetime access for $49 (if you haven’t done so already) :www.candlechartsacademy.com
IMPORTANT- you must log into your account for access to this recording
Contact [email protected]