Candlestick Charting For Dummies
For Dummies (Verlag)
978-0-470-17808-9 (ISBN)
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Want to gain a trading edge with candlestick charts? Find them a little confusing? No worries! Candlestick Charting For Dummies sheds light on this time-tested method for finding the perfect moment to buy or sell. It demystifies technical and chart analysis and gives you the tools you need to identify trading patterns — and pounce! This friendly, practical, guide explains candlestick charting and technical analysis in plain English. In no time, you’ll be working with common candlestick patterns, analyzing trading patterns, predicting market behavior, and making your smartest trades ever. You’ll discover the advantages candlestick has over other charting methods and learn the secrets of combining it with other technical indicators. You’ll also get familiar with different ways to display and interpret price action, including trend lines, support levels, resistance levels, moving averages, and complex indicators. Discover how to:
Construct candlestick charts
Identify and interpret basic patterns
Trade in bull and bear markets
Work with complex patterns and indicators
Avoid False signals
Understand the components of market activity
Deal with bullish or bearish single-stick, two stick, and multistick patterns
Identify and interpret complex patterns
Use indicators to determine the market
Outperform the market in any conditions
Don’t know whether to grab the bull by the horns or just grin and bear it? Read Candlestick Charting For Dummies and get it right the first time.
Russell Rhoads is a trader and analyst for Peak Trading Group in Chicago. His career in trading and market analysis covers over 17 years. He has a BBA and MS in Finance from the University of Memphis and has done graduate level work in Financial Engineering at the Illinois Institute of Technology. Russell also holds the Chartered Financial Analyst designation.
Introduction 1
About This Book 1
Conventions Used in This Book 2
What You’re Not to Read 2
Foolish Assumptions 3
How This Book is Organized 3
Part I: Getting Familiar with Candlestick Charting and Technical Analysis 3
Part II: Working with Simple Candlestick Patterns 4
Part III: Making the Most of Complex Patterns 4
Part IV: Combining Patterns and Indicators 4
Part V: The Part of Tens 5
Icons Used in This Book 5
Where to Go from Here 6
Part I: Getting Familiar with Candlestick Charting and Technical Analysis 7
Chapter 1: Understanding Charting and Where Candlesticks Fit In 9
Considering Charting Methods and the Role of Candlesticks 10
Getting a feel for your options for charting 10
Realizing the advantages of candlestick charting 10
Understanding Candlestick Components 11
Working with Candlestick Patterns 12
Simple patterns 13
Complex patterns 13
Making Technical Analysis Part of Your Candlestick Charting Strategy 14
Trading Wisely: What You Must Understand Before Working the Markets 14
Trading can be an expensive endeavor 14
Paper trading costs you nothing but time 15
Developing rules and sticking to them 15
Chapter 2: Getting to Know Candlestick Charts 17
Recognizing the Many Benefits of Candlestick Charting 18
Seeing is believing: Candlesticks are easy to read 19
You can spot bears and bulls quickly 20
Seeing into the future (sort of) 22
Showing price patterns 23
Admitting the Potential Candlestick Charting Risks 25
Comparing Candlestick Charts with Alternative Charting Methods 26
Line charts 27
Bar charts 27
Point and figure charts 29
Chapter 3: Building a Base of Candlestick Chart Knowledge 31
Constructing a Candlestick: A Core of Four 31
Price on the open 32
High and low price for the session 35
Price on the close 38
Considering Additional Information Included on Candlestick Charts 39
Volume 39
Open interest 40
Technical indicators 42
Fundamental information 43
Chapter 4: Using Electronic Resources to Create Full Charts 49
Turning to the Web for Candlestick Charting Resources 50
Using Yahoo! Finance for charting, trading, and investing 50
Working with BigCharts.com 52
Charting on CNBC.com 54
Using Reuters.com for candlestick charting 56
Creating Candlestick Charts Using Microsoft Excel 57
Finding the data for your chart 57
Making sure the data is in the correct format 58
Building an Excel candlestick chart 59
Adding a moving average to an Excel candlestick chart 60
Adding a trendline to an Excel candlestick chart 63
Adding volume data to an Excel candlestick chart 64
Exploring Your Charting Package Software Options 66
Remembering a few key points when selecting charting software 67
Considering a few charting package options 69
Part II: Working with Simple Candlestick Patterns 71
Chapter 5: Working with Straightforward Single-Stick Patterns 73
The Bullish White Marubozu 74
Understanding long white candles 74
Identifying the three variations of the long white candle 78
The Bullish Dragonfly Doji 80
Recognizing a dragonfly doji 81
Trading based on a dragonfly doji 83
The Bearish Long Black Candle 84
Understanding long black candles 85
Identifying black marubozus 86
Trading based on long black candles 88
The Bearish Gravestone Doji 90
Identifying the gravestone doji 90
Trading based on gravestone dojis 92
Chapter 6: Single-Stick Patterns That Depend on Market Context 95
Understanding Market Environments 96
The three market states 96
Identifying the market trend 96
Delving Into Dojis 98
The long legged doji 98
Other dojis 104
Looking At Other Patterns: Spinning Tops 108
Identifying spinning tops 108
Using spinning tops for profitable trading 109
Discovering More about Belt Holds 112
Spotting belt holds on a chart 113
Buckling down for some belt hold-based trading 113
Deciphering between the Hanging Man and the Hammer 118
Spotting and distinguishing the hanging man and the hammer 118
Trading on the hanging man and the hammer 119
Chapter 7: Working with Bullish Double-Stick Patterns 123
Bullish Reversal Patterns 124
Bullish engulfing pattern 124
Bullish harami 128
Bullish harami cross 130
Bullish inverted hammer 134
Bullish doji star 137
Bullish meeting line 140
Bullish piercing line 142
Bullish Trend-Confirming Patterns 145
Bullish thrusting lines 145
Bullish separating lines 147
Bullish neck lines 150
Chapter 8: Utilizing Bearish Double-Stick Patterns 155
Understanding Bearish Reversal Patterns 155
The bearish engulfing pattern 156
The bearish harami pattern 159
The bearish harami cross pattern 161
The bearish inverted hammer pattern 164
The bearish doji star 167
The bearish meeting line 168
The bearish piercing line or dark cloud cover pattern 172
Making a Profit with Bearish Trend Patterns 174
The bearish thrusting lines 175
The bearish separating lines 178
The bearish neck lines 180
Part III: Making the Most of Complex Patterns 185
Chapter 9: Getting the Hang of Bullish Three-Stick Patterns 187
Understanding Bullish Three-Stick Trend Reversal Patterns 187
The three inside up pattern 188
The three outside up pattern 191
The three white soldiers pattern 193
The morning star and bullish doji star patterns 196
The bullish abandoned baby pattern 199
The bullish squeeze alert pattern 201
Working with Bullish Three-Stick Trending Patterns 204
The bullish side-by-side white lines pattern 204
The bullish side-by-side black lines pattern 207
The upside tasuki gap pattern 210
The upside gap filled pattern 214
Chapter 10: Trading with Bearish Three-Stick Patterns 217
Understanding Bearish Three-Stick Trend Reversal Patterns 217
The three inside down pattern 218
The three outside down pattern 220
The three black crows pattern 223
The evening star and bearish doji star patterns 226
The bearish abandoned baby pattern 229
The bearish squeeze alert pattern 231
Forecasting Downtrend Continuations 234
The bearish side-by-side black lines pattern 234
The bearish side-by-side white lines pattern 237
The downside tasuki gap pattern 240
The downside gap filled pattern 242
Part IV: Combining Patterns and Indicators 247
Chapter 11: Using Technical Indicators to Complement Your Candlestick Charts 249
Using Trendlines 250
Drawing trendlines 250
Considering trendline direction 251
Taking advantage of automated trendlines 252
Utilizing Moving Averages 253
Selecting appropriate moving average periods 253
Using simple moving averages 253
Using other types of moving averages: What have you done for me lately? 255
Combining two moving averages 258
Combining three moving averages 258
Examining the Relative Strength Index 260
Calculating the RSI 261
Reading an RSI chart 262
Cashing In on Stochastics 263
Grasping the math behind the stochastic oscillator 263
Interpreting the stochastic oscillator 264
Buddying up with Bollinger Bands 265
Creating Bollinger bands 265
Using the bands 266
Chapter 12: Buy Indicators and Bullish Reversal Candlestick Patterns 267
Buying with the RSI and Bullish Reversal Candlestick Patterns 267
Using the RSI to help pick a long entry point 268
Using the RSI to help pick long exits 270
Buying with the Stochastic Indicator and a Bullish Reversal Candlestick Pattern 272
Using the stochastic indicator to help pick a long entry point 273
Using the stochastic indicator to help pick long exits 274
Chapter 13: Sell Indicators and Bearish Reversal Candlestick Patterns 279
Shorting with the RSI and Bearish Candlestick Patterns 279
Picking short entry points with the RSI and candlesticks 280
Using the RSI to help pick short entry and exit points 282
Using the Stochastic Indicator and Bearish Candlestick Patterns for Shorting 285
Picking short entry points 286
Deciding when to get in and out of shorts 288
Chapter 14: Using Technical Indicators Alongside Bullish-Trending Candlestick Patterns 291
Using Trendlines and Bullish-Trending Candlestick Patterns for Buying and Confirmation 292
Using trendlines and bullish-trending candlestick patterns to pick long entry points and confirm trends 292
Picking long exits and determining stop levels with trendlines and bullish-trending candlestick patterns 294
Combining Moving Averages and Bullish-Trending Candlestick Patterns 297
Using moving averages with bullish-trending candlestick patterns to confirm trends 297
Using the moving average and bullish-trending candlestick patterns to pick long exits and determine stop levels 300
Chapter 15: Combining Technical Indicators and Bearish-Trending Candlestick Patterns 303
Putting Trendlines Together with Bearish-Trending Candlestick Patterns for Selling and Confirmation 303
Short trades and trend confirmation with trendlines and bearish patterns 304
Bearish trendlines and candlestick patterns leading to short entries and exits 306
Combining Moving Averages and Bearish-Trending Patterns for Short Situations 309
Pinning down short entry points and confirming trends 309
Using moving averages and bearish-trending candlestick patterns to pick short exits and select stop levels 311
Part V: The Part of Tens 315
Chapter 16: Ten Myths about Charting, Trading, and Candlesticks 317
There’s No Difference between Candlesticks and Bar Charts 317
Market Efficiency Makes It Impossible to Beat the Market over the Long Run 318
Only a Full-time Professional Can Make Money in the Markets 318
Technical Analysis is Nothing More Than Reading Tea Leaves 319
Charting is for Short-Term Traders Only 320
You Must Be Rich to Start Trading 320
Trading is an Easy Way to Get Rich Quick 321
Candlestick Charts Require More Data and Are More Difficult to Create 321
The Trading Game is Stacked against the Small Trader 321
Selling Short is for Professional Traders Only 322
Chapter 17: Ten Tips to Remember about Technical Analysis 323
Charts Can Give False Signals 323
People Will Give You a Hard Time 324
There’s No Definite Right or Wrong Opinion of a Chart 324
A Single Chart Doesn’t Tell a Whole Story 324
Charting is Part Science, Part Art 325
You Can Overdo It 325
Develop a Backup System 326
Error-Free Data Doesn’t Exist 326
No System is Silly As Long As It Works 326
Past Results Don’t Always Predict Future Performance 327
Index 329
| Erscheint lt. Verlag | 1.4.2008 |
|---|---|
| Reihe/Serie | For Dummies |
| Sprache | englisch |
| Maße | 183 x 231 mm |
| Gewicht | 499 g |
| Einbandart | Paperback |
| Themenwelt | Sachbuch/Ratgeber ► Beruf / Finanzen / Recht / Wirtschaft ► Wirtschaft |
| Wirtschaft ► Betriebswirtschaft / Management ► Finanzierung | |
| ISBN-10 | 0-470-17808-6 / 0470178086 |
| ISBN-13 | 978-0-470-17808-9 / 9780470178089 |
| Zustand | Neuware |
| Informationen gemäß Produktsicherheitsverordnung (GPSR) | |
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