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Attachments: Q on CandleSticks and Nisson.
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Q on CandleSticks and Nisson.

  • #1
  • First Post: Feb 9, 2010 8:03am Feb 9, 2010 8:03am
Hi Fellas,
Even though i have a cursory knowledge (imo) on candlesticks, i would like to devote the free time i have this coming month to understanding candlesticks from a more basic and psychological level, which as i understand Steve Nisson has explained well in his book "Japanese Candlestick Charting". My questions are:

1. Is there a marked difference between the first and second editions? (Or will having the first one do).

2. The author mentions on his website, that candlestick techniques differ in the spot Fx market as compared to the other financial markets. In that case can anyone explain why this is so, if this is so.

3. Is any of the courses on his website worth it? I personally think a lot has been covered (this is a guess on my part) in his aforementioned book and the one that followed "beyond candlesticks".

4. Any other comparable sources for candlestick education.

Thanks for your time.
  • #2
  • Edited 1:22pm Feb 9, 2010 1:18pm | Edited 1:22pm
1. You don't need to know every single candlestick pattern, just the main ones will do you. The descriptions will be the same.
2. Forex candlesticks he has more "relaxed" rules for patterns. Especially reversal patterns. He uses them to define strong support & resistance areas.
3. Only seen one of his Live Seminars, many years ago. I believe his jokes are still the same.
4. Lots of free stuff out there on Japanese Candlesticks. I found info here useful in my early days of trading. Just learn the main patterns, you really don't need to know all of them. Learn Support & Resistance with Candlesticks.

http://stockcharts.com/school/doku.p...o_candlesticks

http://www.babypips.com/school/what_...ndlestick.html
Attached File(s)
File Type: mq4 Pattern_Recognition_Master_v3.mq4   28 KB | 402 downloads
It never gets easier, you just get better
  • #3
  • Feb 9, 2010 2:16pm Feb 9, 2010 2:16pm
Floating around on the internet is a Nison-written PDF called Profiting in Forex, which IMO is better 'tuned' to the FX markets than any of his books. (I don't condone piracy, but if you happen to stumble upon it like I did.......)

A few points:

With forex we're invariably dealing with very approximate probabilities, and accurately defining candle types and patterns is arguably less important that their context, e.g. in relation to overbought/oversold (location within a Bollinger band, for example), oscillator divergences, support/resistance and other line studies, fibo retracement levels, and so on. The greater the number of independent edges we can stack in our favor, the more potentially favorable the probability is, IMO.

As always, candles are useful in the way that they tell a story of how the battle between the bulls and bears is unfolding. However, keep in mind that their value is restricted in the sense that price is continuous while candles break its path using arbitrary cutoff points. For example, a forex broker whose chart timezone is GMT+1 will display different 4-hour candles than one whose timezone is GMT+2, because different data is being gathered to build each candle. The continuous 24-hour nature of the FX market also means that some of the patterns that involve gaps (from candle close to the next open) and islands are going to occur much more rarely than in other markets.

Personally, I find candles useful for two major reasons: (1) their highs and lows show rejection from key levels, e.g. double tops/bottoms, 'flipover' S/R, etc; (2) the size of the candle is a measure of momentum, i.e. how fast price is moving, indicating the strength of buying/selling pressure.

Candles on longer TFs are arguably more 'reliable' (in terms of their predictive quality) than those on shorter ones. For example, hammer candles on 1-hour or lower TFs frequently amount to nothing more than profit-taking within a move. Again, this highlights the need to combine candles with context.

One of the most important contexts for me is 'trend'; I look for large candles (outside bars, engulfing bodies, hammers, railroad tracks) that signal probable trend resumption following a pullback. If the candle bounces off significant lines or levels (context, again), then probabilities improve commensurately.

And finally, it goes without saying that candles generally relate to entry, and entry is only one part of the trading equation.

Footnote: there are some links to free material on candle patterns in my post here.
  • #4
  • Feb 9, 2010 4:17pm Feb 9, 2010 4:17pm
Quoting Shabs19
1. You don't need to know every single candlestick pattern, just the main ones will do you. The descriptions will be the same.
2. Forex candlesticks he has more "relaxed" rules for patterns. Especially reversal patterns. He uses them to define strong support & resistance areas.
3. Only seen one of his Live Seminars, many years ago. I believe his jokes are still the same.
4. Lots of free stuff out there on Japanese Candlesticks. I found info here useful in my early days of trading. Just learn the main patterns, you really don't need to know...

Thanks for the links Shabs, will look into.
  • #5
  • Feb 9, 2010 4:41pm Feb 9, 2010 4:41pm
Quoting hanover
Floating around on the internet is a Nison-written PDF called Profiting in Forex, which IMO is better 'tuned' to the FX markets than any of his books. (I don't condone piracy, but if you happen to stumble upon it like I did.......)

A few points:

With forex we're invariably dealing with very approximate probabilities, and accurately defining candle types and patterns is arguably less important that their context, e.g. in relation to overbought/oversold (location within a Bollinger band, for example), oscillator divergences, support/resistance...

Ty David (I dont know u, but everyone calls u tht),
Ill answer u bottom up, actually that last little teeny weeny bit of the puzzle (i.e. the "entry"), is what im searching for. I actually joined this forum after reading your posts for the past two years. Mostly just like yourself (obviously im a rookie so not making comparisons), i have realized that no matter how we skew the risk reward ratio, the hit rate, the %equity at stake etc etc (basically all the position sizing we need). And no matter how much we master our psychology (which for me has taken the better part of the last twenty years, and im still working on it), although these are huge ingredients for trading success (i would say 90%):

You still need an edge.

And that last 10% is there to be had (because someone is winning). So after flipping through some basic materials on basic TA etc, i was gonna start a serious study by basically going through Nisson and Murphy (get a comrehensive view). And obviously the various posts on FF (including the one u provided). Basically just cover as much as possible to be able to implement a few systems that i could live with and etch out 3% / month.

(Ive studied Nauzer, Vince and Ryan O Neal, well enough, to get a good grip on risk, geometric growth, drawdowns etc). In fact im going about this trading thing backwards i guess :}.

Mostly looking to trade the equity and future markets, as i would like to deal with a daily chart that has some substance to it (for the precise reason u mentioned regarding varying times in Fx).

But am obv intrigued by the Fx angle too, hence the questions, and also i find some great trading minds contributing on this forum.

Thanks for the book and your time.

Vik.
  • #6
  • Feb 9, 2010 9:54pm Feb 9, 2010 9:54pm
Quote
Floating around on the internet is a Nison-written PDF called Profiting in Forex, which IMO is better 'tuned' to the FX markets than any of his books. (I don't condone piracy, but if you happen to stumble upon it like I did.......)

A few points:

With forex we're invariably dealing with very approximate probabilities, and accurately defining candle types and patterns is arguably less important that their context, e.g. in relation to overbought/oversold (location within a Bollinger band, for example), oscillator divergences, support/resistance...

Once again great post by hanover.
  • #7
  • Feb 10, 2010 2:26am Feb 10, 2010 2:26am
Quoting Vik22
And that last 10% is there to be had (because someone is winning).........
Vik, and Kingfisher, thanks for your feedback, and I wish you all the best on your journey toward conquering that last 10%.

David
  • #8
  • Feb 10, 2010 3:43am Feb 10, 2010 3:43am
What Nison also stresses on is not making improbable entries, using Candlestick patterns ie. Buying into resistance and selling into support.

What you could do for exits, is tightening your stoploss when the market is "exhausted" in a trend, dojis, spinning tops etc.

Maybe others will add on how they use candlestick patterns..........
It never gets easier, you just get better
  • #9
  • Feb 11, 2010 5:03am Feb 11, 2010 5:03am
Quoting Shabs19
What Nison also stresses on is not making improbable entries, using Candlestick patterns ie. Buying into resistance and selling into support.

What you could do for exits, is tightening your stoploss when the market is "exhausted" in a trend, dojis, spinning tops etc.

Maybe others will add on how they use candlestick patterns..........
Yeah, started the book, should be done in a couple of days, ill comment then. Thanks Shabs.

Btw, how did u like his seminar? Did it "add" anything to what you already knew (from his writings or otherwise), do u think it was worth it?
  • #10
  • Feb 11, 2010 8:48am Feb 11, 2010 8:48am
I have 3 books by Steve Nison, Japanese candlesticks Charting Techniques, Beyond Candlesticks and The Candlestick Course.

The last book he gave out free at his Seminar with a book of his slides that he used on the day and I got it signed by him at the time. This one I found the most useful as it was concise & to the point and there is a continuing quiz throughout testing your understanding.

Isn't it funny, what you get free, sometimes gives the best value.

At that time he was only into stocks, Forex was never mentioned. As for value, the price I paid was not too extortionate, and he will entertain you. He is a showman and an extremely likeable man. He is a salesman also.

But end of the day, if you can afford it go, but the last book I mentioned is all you need, in my humble opinion.
It never gets easier, you just get better
  • #11
  • Feb 17, 2010 8:27am Feb 17, 2010 8:27am
Hi Vik,

Thought I would add my 2p worth.
I can't comment wether the 2nd edition of Candlestick charting techniques is any better than the first edition as I have the second edition. I would imagine the 2nd one is slightly more up to date.

Re - the difference with Forex is you will not get windows and gaps appearing. As the open of the next candle is at the close of the previous candle apart from the open on Sunday night.
  • #12
  • Edited 3:28am Feb 18, 2010 3:14am | Edited 3:28am
Quoting Shabs19
I have 3 books by Steve Nison, Japanese candlesticks Charting Techniques, Beyond Candlesticks and The Candlestick Course.

The last book he gave out free at his Seminar with a book of his slides that he used on the day and I got it signed by him at the time. This one I found the most useful as it was concise & to the point and there is a continuing quiz throughout testing your understanding.

Isn't it funny, what you get free, sometimes gives the best value.

At that time he was only into stocks, Forex was never mentioned. As for value,...

Ok "The Candlestick charting course" ..... hadnt seen tht around, gonna look for it, i did download a slideshow (Hanover), on FX by him. Ty.
  • #13
  • Feb 18, 2010 3:26am Feb 18, 2010 3:26am
Quoting harmudge
Hi Vik,

Thought I would add my 2p worth.
I can't comment wether the 2nd edition of Candlestick charting techniques is any better than the first edition as I have the second edition. I would imagine the 2nd one is slightly more up to date.

Re - the difference with Forex is you will not get windows and gaps appearing. As the open of the next candle is at the close of the previous candle apart from the open on Sunday night.
Yeah, i get what u mean, i believe FX has some timing caveats along with obvious lack of consistency from platform to platform. Im done with the first ed, basically i think his techniques (or the Japanese for tht matter) have been formulated with daily opens and closes in mind primarily, for the futures markets (he mentions lack of frequent gapping in the equity mkts and how to adjust for them).

But if u combine and tweak around them (keeping the idiosyncracies of the FX mkt for example), something could work out .....

Anyways, on a side note, someone here turned me onto "Beat the FX dealer", a 2008, fairly concise work on the FX market, written by Agustin Silvani. He uses candlestick analysis along with his other extensive knowledge to at least give some idea of a framework u can work within.

i'll check the 2nd ed out if i get my hands on it or maybe "the candlestick course" like Shabs mentioned, i "think" i learnt a lot ..... from the first book, thanks and take care.
  • #14
  • Feb 18, 2010 6:59am Feb 18, 2010 6:59am
Will have to look for that Beat the FX Dealer myself sounds interesting.

Incidentaly go to FX1618.com there is lots of trading books available free.

Also if you search the net hard enough you can find Steve Nisons 8 dvd course as a free d/load, retail over $2k.
  • #15
  • Feb 19, 2010 5:00pm Feb 19, 2010 5:00pm
Damn, cant seem to relocate tht link for u, ill pm u with it as soon as i do.

Thanks for the site.
  • #16
  • Last Post: Feb 19, 2010 6:25pm Feb 19, 2010 6:25pm
Thanks Vik, it will be appreciated.
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