Nison Candlestick Summit – Day 2
The Candlestick Summit
Reaching the top levels of Nison
candlesticks- Day 2
Small real body inside an unusually
long white real body.
BASIC CRITERIA
• Two session pattern
• Market in uptrend, but trend not critical
• First candle unusually long white candle
• Second candle is much smaller than 1st
candle (about 25% or less).
• 2nd candle can be the same- or opposite
color- of first candle
• 2nd real body is within 1st candle’s real body
PATTERN PSYCHOLOGY
SUPPORT/MOMENTUM TRADING
• Not used as resistance (unless 2nd
candle is reversal signal (i.e.
shooting star)
• Not used for momentum trading
The indications based on the tall white
candle’s vitality is for the rally to continue,
But next session’s gap down and then failure
to resume the advance to beyond the prior
session shows those who had forecast
strength are wrong! The rally could now be
running out of fuel.
www.candlecharts.com
www.candlecharts.com
1
Nison Candlestick Summit – Day 2
 For FX, intraday and indexes can have
the same (or within 2 pips for FX) open
as prior close
 If the 2nd candle is a doji, the pattern is
called a harami cross
 The more the 2nd candle gets deeply
into the white candle the better the
signal.
 Because FX, etc, black can’t get deeply
into white candle, it is best to wait for
bear confirmation by a lower open or
close than black candle’s real body.
FX Pattern
 In general the less the 2nd candle gets
more into the white candle the more
confirmation is needed.
 Opposite of bullish harami
www.candlecharts.com
Bear Harami
Not Bear
Harami
Because these
are near the
highs of the
prior candle
would want
bear candle
confirmation
www.candlecharts.com
Confirmation important in FX
www.candlecharts.com
www.candlecharts.com
2
Nison Candlestick Summit – Day 2
Black candle that opens higher and then
closes more than halfway into prior
white real body.
www.candlecharts.com
BASIC CRITERIA
• Two session pattern
• Market in uptrend
• Open of black candle higher than prior close
• Black candle closes into white candle
STRICT CRITERIA
• Black candle closes more than 50% into white
real body
• Black candle opens above prior high
• Tall white and black candles
PATTERN PSYCHOLOGY
SUPPORT/MOMENTUM TRADING
• Highest high of both candles as
resistance
• Consider buying on breakout over
high of pattern
White candle and then gap higher keeps bulls
happy. But with black candle finishing well
below white candle’s close the “upward
energy has cooled to the extreme” causing
the bulls to become concerned and bears
bolder.
 For FX, intraday and indexes can have
the same (or within 2 pips for FX) open
as prior close
 If the black candle doesn’t get more
than ½ way into white it is called an
“incomplete dark cloud cover” and it is
best to wait for bear confirmation.
 The more the open on black candle
gaps away from the prior high/close
the better the pattern (for non FX).
FX Pattern
 Opposite of piercing pattern
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3
Nison Candlestick Summit – Day 2
Is it a valid Nison Candlestick Signal?
?
?
Dark Cloud Cover defines Resistance
www.candlecharts.com
Dark Cloud Cover at resistance
Why is this
not a bullish
engulfing
pattern?
www.candlecharts.com
www.candlecharts.com
4
Nison Candlestick Summit – Day 2
Dark cloud rains pain for the bulls
“Oh crap!”
Think there
is trouble
near $410?
Happy time for
the bulls- new
high close!
www.candlecharts.com
Dark Cloud Cover
Dark Cloud Cover and momentum
www.candlecharts.com
www.candlecharts.com
5
Nison Candlestick Summit – Day 2
Dark Cloud Cover
Is this telling
you that there
is a shift in
psychology?
Not dark cloud cover
Chart courtesy of Genesis FT
www.candlecharts.com
BASIC CRITERIA
• Trend not important
• White candle followed by black candle that
opens within white real body and closes
under prior open.
www.candlecharts.com
BASIC CRITERIA
• Trend not important
• White candle followed by black candle that
opens within white real body and closes
under prior open.
STRICT CRITERIA
• Both long real bodies
• 2nd candle closes under prior low
• Black real body closes at, or near, its lows
PATTERN PSYCHOLOGY
SUPPORT/MOMENTUM TRADING
• Highest high of both candles as
resistance
• Consider buying on breakout over
high of pattern
www.candlecharts.com
The white candle means the bulls are running
the show. And then the next session the
market gaps lower and is not only unable to
make it this lost ground, but closes under the
white candle. This shows the bullish energy
has been sapped out of the market resulting
in very scared bulls.
6
Nison Candlestick Summit – Day 2
 Since the market has to gap lower this
pattern not applicable to FX.
 The more the market gaps down on the
open and the lower the close on the
black candle the more meaningful the
pattern
 Keep in mind risk/reward since this
pattern is completed after substantial
move has already occurred.
 Opposite of Bull Sash pattern
 If open of black candle is same (or
lower) as prior open, it is a Bearish
Separating Line.
www.candlecharts.com
Bear Sash
Bear Sash
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Bear Sash
Bear Sash
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7
Nison Candlestick Summit – Day 2
Being a Market Chameleon
Bear Sash
Bull Sash
www.candlecharts.com
White candle followed by black candle
that opens at (or below) prior open. Then
closes under black candle open.
www.candlecharts.com
BASIC CRITERIA
• Trend not important
• White candle followed by black candle that opens at
(or below) prior open. Then closes under white
candle’s open.
STRICT CRITERIA
• Both long real bodies (rare)
• Black real body closes at, or near, its lows
PATTERN PSYCHOLOGY
SUPPORT/MOMENTUM TRADING
• Highest high of both candles as
resistance
• Consider buying on move above
high of pattern
www.candlecharts.com
With the gap down on 2nd day the bulls sense
danger. And then to make matters worse for them,
the market can’t even make up for the ground lost
on the opening. The tide of the market momentum
has now turned down.
www.candlecharts.com
8
Nison Candlestick Summit – Day 2
 Easy way to remember this pattern is
the opens are the about the same (or
the 2nd candle open gaps away from 1st
candle’s open.)
 Since the market has to gap lower this
pattern not applicable to FX.
 Major challenge with this pattern is
since it is completed after substantial
move, could mean poor risk/reward.
 Opposite of Bull Separating Pattern
 If open of black candle is within prior
white real body, it is a Bear Sash
Pattern.
www.candlecharts.com
Bear Separating line
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Bear Separating Line
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Nison Candlestick Summit – Day 2
Bear Separating line
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TWEEZERS TOP
Two candles that have the same lows.
First candle large white.
www.candlecharts.com
A blended candle is a way of “compressing” combinations
of candle lines into as if they made one candle
Source: KABUSHIKISOUBA NO
TECHNICAL BUNSEKI – G.Ikutaro
www.candlecharts.com
10
Nison Candlestick Summit – Day 2
How do we make a Blended Candle?
close 2
=
open 1
1) Use open of the first session for open of blended candle
2) Use close of the last session of pattern for close of
blended candle.
3) Use highest high and lowest close of all sessions for
upper and lower shadows of blended candle.
think of Blended candle as a “Summary candle” of the pattern analyzed.
How does this help?
1- To determine if a pattern
is net bullish or bearish
www.candlecharts.com
2- To compare variations of candle
patterns to determine the strength of
the signal
Classic dark cloud
cover
How is this non classic dark
cloud cover different and what
does it mean to outlook?
A falling window is resistance
Most important
resistance level
Resistance
Zone
www.candlecharts.com
www.candlecharts.com
11
Nison Candlestick Summit – Day 2
Importance of Windows
www.candlecharts.com
First candle long white, second candle small real body, and third
candle is black that gets deeply into first real body.
white or
black
FX
www.candlecharts.com
Candles in Context
Evening Star
Would you
buy here?
How about
here?
Morning Star
www.candlecharts.com
www.candlecharts.com
12
Nison Candlestick Summit – Day 2
Abandoned Baby Top
www.candlecharts.com
Falling Three Methods
A series of small candles inside the
range of a long black candle. The last
candle is another long black.
www.candlecharts.com
Falling Three Methods
www.candlecharts.com
13
Nison Candlestick Summit – Day 2
Falling Three Methods
Why about this falling
three gives you extra
bearish confidence?
Three consecutive black candles,
each with a lower close.
www.candlecharts.com
Three Black Crows
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14
Nison Candlestick Summit – Day 2
Nison Case Study
1. What are the reversal signals?
2. Where is potential support?
3. Any signals confirming support
area forecasted in #2?
www.candlecharts.com
A- Chart Challenge
1. What are the reversal signals?
2. Where is potential support?
3. Any signals confirming support
area forecasted in #2?
Nison Case Study
What 4 bear candle
signals can you find in
the box?
www.candlecharts.com
15
Nison Candlestick Summit – Day 2
Candlestick
Charting
Strategies
Candlesticks +
Western
Indicators
Candlesticks + Trade Management
East + West Confirmation
Where a candle
signal confirms a
Western technical
signal
www.candlecharts.com
Candles plus Bollinger Bands……
www.candlecharts.com
www.candlecharts.com
16
Nison Candlestick Summit – Day 2
Crack and Snap with Volume
The arrow points to a “Snap and Crack”. What
does volume do to increase the likelihood of this
technique working?
www.candlecharts.com
Nison Case Study
At the arrow we see a doji.
1) What is the volume on this doji telling us about the supply/demand situation?
2) What 2 candlestick signals in August give us a clue that there was support at the doji?
3) Although the doji was holding a support area, what happened on the day of the doji that would keep the short
term trend down? Based on this, what would we need to see to give bullish confirmation of that support area?
www.candlecharts.com
Using NCS and candles to confirm resistance
Why wasn’t
this window
my 1st
support ?
www.candlecharts.com
www.candlecharts.com
17
Nison Candlestick Summit – Day 2
With Nison Candle Confirmation – long put at resistance
mkt @22.50
Buy 20 put @.70
5 days later mkt @21, 20 put @ .26
www.candlecharts.com
Candles and the ADX:
The Perfect Fit
www.candlecharts.com
www.candlecharts.com
18
Nison Candlestick Summit – Day 2

Stands for Average Directional Indicator

Shows how strongly a market is trending

Does not show direction of trend
www.candlecharts.com
Strong ADX with
prices in up trend.
Strong ADX with
prices in down trend.
www.candlecharts.com
1
2
www.candlecharts.com
www.candlecharts.com
19
Nison Candlestick Summit – Day 2

Some technical indicators, such as moving averages,
momentum trading, work better in strongly
trending markets.

Some technical indicators, such as oscillators, work
better in non trending markets.

Traders check ADX to see if the technical indicator
they use is in right trend environment
www.candlecharts.com

Use only on daily charts –
except for FX

Use only for entries

Lagging indicator

Slow to recognize a new trend
www.candlecharts.com
SteveApple has recently gone from 120 to 150 and the ADX on a daily basis
has not moved up. This is surprising. Comments? - Pete
www.candlecharts.com
www.candlecharts.com
20
Nison Candlestick Summit – Day 2

Common mistake- looking
at ADX level.

Slope is the key

Slope=change in ADX from
yesterday to today.
(today’s ADX level-yesterday’s
ADX level)

Greater the slope, stronger
the trend
-.31
ADX 22.04
ADX at 20.96
Slope = 24.11-22.04 =+2.07
ADX 24.11
ADX at 20.64.
What do we need to
determine the slope
on this day?
Slope = 20.64-20.96 = -.32
www.candlecharts.com
ADX:22.38
Slope = +2.08
14 Period
ADX slope
increasing
.5 or more
ADX:27.56
ADX:20.30
ADX:26.03
What is the slope?
Strong uptrend?
www.candlecharts.com
www.candlecharts.com
21
Nison Candlestick Summit – Day 2
-.31
Minimum:
14 Period
ADX slope
+.25 or
less
ADX:18.26
ADX:18.57
Strict: 14
Period
ADX slope
decreasing
www.candlecharts.com
[email protected]
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Candles and ADX - The Perfect Fit
Reversal candles
help pick top and
bottoms.
Increase % by not
going against
strong trends.
www.candlecharts.com
22
Nison Candlestick Summit – Day 2
www.candlecharts.com
Minimum:
14 Period
ADX slope
+.25 or
less
Strict: 14
Period
ADX slope
decreasing
Do we have to measure the
ADX slope on this hammer?
www.candlecharts.com
Minimum:
14 Period
ADX slope
.25 or less
-.40
-.10
Strict: 14
Period
ADX slope
decreasing
www.candlecharts.com
www.candlecharts.com
23
Nison Candlestick Summit – Day 2
ADX slopes
2.24, 2.53, 2.67
Bull shadows on descent. But
based on ADX which of these is
more likely a turn?
Why didn’t I
put ADX
numbers for
these?
www.candlecharts.com
ADX : 27.98
ADX : 30.38
What candle patterns are at
the dashed arrows?
ADX : 31.80
What is the ADX telling us?
www.candlecharts.com
+.95
Minimum:
14 Period
ADX slope
+.25 or
less
-.31
ADX:18.26
ADX:18.57
Strict: 14
Period
ADX slope
decreasing
www.candlecharts.com
www.candlecharts.com
24
Nison Candlestick Summit – Day 2
Slope +.97
www.candlecharts.com
FOR BEAR CANDLE
REVERSAL SIGNALS
• Step 1 – get candle
signal
• Step 2 – ADX shows
uptrend easing or
no trend:
ADX slope
increases by
less than .25,
and better if
slope is
negative
ADX:42.85
and 41.02
so slope is
-1.83
www.candlecharts.com
FOR BULL CANDLE
REVERSAL SIGNALS
ADX:
1-31.97
2-32.67
3-32.48
4-32.45
5-32.53
6-30.23
• Step 1 – get candle
signal
6
• Step 2 – ADX shows
downtrend easing or no
trend:
ADX slope increases
by less than .25, and
better if slope is
negative
1
3
2
4
5
www.candlecharts.com
www.candlecharts.com
25
Nison Candlestick Summit – Day 2
What patterns were at 1
and 2?
1
What pattern was
completed on last candle?
On the last candle, based
on ADX what is your
action/why?
2
ADX
Yesterday: 27.18
Today: 28.79
www.candlecharts.com
What pattern was
completed today?
Based on ADX what is your
action/why? What else
would you consider?
ADX
Yesterday: 29.75
Today: 30.95
www.candlecharts.com
What pattern was
completed today?
Based on ADX what
is your action/why?
What else would you
consider?
ADX
Yesterday: 31.27
Today:30.94
www.candlecharts.com
www.candlecharts.com
26
Nison Candlestick Summit – Day 2
1- Based on ADX
which candle
line would you
sell? 1,2 or 3?

3- What would you do here
+.80

+.20

based on ADX and prevailing
technical signals (candle and
non candle)?
+.59
-.40
2- Based on ADX
would you buy this
piercing pattern?
www.candlecharts.com
What pattern did this complete?
(hint look at the opening of both sessions)
What else happened on this session that
would make you nervous from the long side?
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27
Nison Candlestick Summit – Day 2
Candlesticks do not give price targets
Pivot Highs and Lows
This high is higher than the
session before and after it
This low is lower than the
session before and after it
Resistance Levels
Support Levels
Breakouts- long call on retracement
Stalling at resistance.
Looking for pullback
to breakaway gap
Mkt @ 428
Target 448
Buy 430 call
Stop close under window
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www.candlecharts.com
28
Nison Candlestick Summit – Day 2
Candles and Price Targets
This doji takes on extra significance
because it confirms a resistance level
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Box Range
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Trading Box Ranges
New high- let’s buy
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29
Nison Candlestick Summit – Day 2
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East and West- Measured Moves
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Box Range
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30
Nison Candlestick Summit – Day 2
Head and Shoulders
Head
Right
Shoulder
Left Shoulder
Neckline
Sell
signal
Head and Shoulders Top
How Candles Put More $$$ in your Pocket
What was candle reversal
here at 150
Extra profit
Reversal with Western
Technique at 141
What signal did we
have here at support?
www.candlecharts.com
TASC Interview - Jan. 24, 2003 S&P at 860
1) Once the neckline’s
support is broken, it
should become
resistance.
Head and
Shoulder top
2) To get a target with the
head and shoulders top
we measure from the top
of the head to the
neckline.
neckline
Interview
“… the heads and shoulders top on the
S&P gives a target to near 775. A close
over 870 would void this.”
www.candlecharts.com
Hammer
31
Nison Candlestick Summit – Day 2
Trading on the open
www.candlecharts.com
Trading on the open
www.candlecharts.com
Candlestick
Charting
Strategies
Candlesticks +
Western
Indicators
Candlesticks + Trade Management
www.candlecharts.com
32
Nison Candlestick Summit – Day 2
The 10 rules of Disciplined Trading and Investing
1. Don’t forget “candles in context”
Candles in Context
“To know where
you stand is as
important as
candle pattern
recognition.”
www.candlecharts.com
33
Nison Candlestick Summit – Day 2
Misinformation can cost you $$$
?
www.candlecharts.com
Candles in Context
Would you buy
on this
hammer?
www.candlecharts.com
Candles in Context
Not an ideal dark
cloud cover, but??
www.candlecharts.com
www.candlecharts.com
34
Nison Candlestick Summit – Day 2
Trading with Discipline
1. Don’t forget “candles in context”
2. If…then system
The If…Then Principle:
• If the market does not act as
forecasted then exit the position (Protective
Stops)
• Initiate a position when the market
justifies your potential trade (i.e. If the
market breaks above resistance, then buy.
• If the market does something different
than before then adjust trading strategy
If… then
Head and Shoulders Top?
www.candlecharts.com
www.candlecharts.com
35
Nison Candlestick Summit – Day 2
If… then
Was Head and Shoulders Top Confirmed ?
www.candlecharts.com
I was thinking of buying GM for a longer
term investment and was willing to give up
a few $ to buy on momentum. Where do
you think my buy area was?
When would you pull the buy limit trade?
www.candlecharts.com
Momentum trade
Pulled buy stop
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www.candlecharts.com
36
Nison Candlestick Summit – Day 2
The 10 rules of Disciplined Trading and Investing
1. Don’t forget “candles in context”
2. If…then system
3. Stops – always use them
Protecting
your Assets
www.candlecharts.com
37
Nison Candlestick Summit – Day 2
Protective Stops keep you in the game!
Looks
promising at
the white
candles
1
www.candlecharts.com
How Education Saves you $$$$
Hammer
www.candlecharts.com
Nison Case Study
What
would you
do here
and why
You shorted
here
www.candlecharts.com
www.candlecharts.com
38
Nison Candlestick Summit – Day 2
Protecting
your Assets
Protective Stops keep you in the game!
Looks
promising at
the white
candles
1
How Education Saves you $$$$
Hammer
www.candlecharts.com
39
Nison Candlestick Summit – Day 2
Nison Case Study
What
would you
do here
and why
You shorted
here
www.candlecharts.com
Exit Strategies
 Protective Stops
 Time Stops
 Trailing Stops
© Steve Nison’s Candlecharts.com
If the market does not act as
expected within about five
sessions then consider
exiting
www.candlecharts.com
40
Nison Candlestick Summit – Day 2
Don’t Stay Around
What are you doing hanging
around! You’re wasting
precious resources.
Hammer and Bull Engulf
Chart courtesy of Genesis FT
www.candlecharts.com
Trailing Stops
As the market moves
in your direction –
stop is adjusted to
help ride the trend.
www.candlecharts.com
“Golden” and “Dead” Crosses
Compares two moving averages
GOLDEN CROSS: shorter crosses above longer
DEAD CROSS: shorter crosses under longer
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41
Nison Candlestick Summit – Day 2
Answer: 3 and 12 day
www.candlecharts.com
Trailing stops - letting the profits run
“I usually exit, it
corrects somewhat but
then continues to go in
the original direction
after that.”
Shooting
Star
Falling
window
You sold at shooting star or
falling window. A rally from a
bull harami gets you nervous
and you exit. But you’re still
playing with the market’s
money- so another option:
trailing stop….
www.candlecharts.com
Trailing stops - letting the profits run
Shooting
Star
Falling window
Where you got nervous
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42
Nison Candlestick Summit – Day 2
Letting Profits Run
Could take some
or all profits here
Shooting star
Or use dead cross
as your trailing
stop and would
thus exit here
Buy and set
protective stop
www.candlecharts.com
Trailing Stops to let profits run
Now at targetDoji warns of
caution. But you
want to let profits
run.
Potential Target
Buy and set
protective stop
www.candlecharts.com
Trailing Stops to let profits run
doji
www.candlecharts.com
www.candlecharts.com
43
Nison Candlestick Summit – Day 2
The 10 rules of Disciplined Trading and Investing
1. Don’t forget “candles in context”
2. If…then system
3. Stops – always use them
4. Consider options
Nison Candlesticks for Portfolio Protection
How can I boost profits even when my core markets are falling?
By using Nison candlesticks for pinpoint timing entering and
exiting covered calls and protective puts
www.nisonoptionsacademy
Nison Candle strategies for portfolio protection
Buy put
for
move
to
31.50
Mkt @ 33.75 buy 32.5 put @ .80
In case of move to 31.50
Reached target but no reversal signals (worth 1.60)
So ride it down to 30.50 at bull engulf put @ 2.25.
www.candlecharts.com
www.candlecharts.com
44
Nison Candlestick Summit – Day 2
Time decay
Time decay (or time "erosion") is the decrease, of an
option premium's time value due to the passage of time.
The rate of this decay increases as expiration approaches.
At expiration a call or put is worth only its intrinsic value, if
it has any.
“With long options timing is everything since time
is working against you.”
www.nisonoptionsacademy.com
Using Nison Candle Scanner software for Options:
Method 1- Set up an alert
From the bear side
1. NCS finds a bearish engulfing pattern
2. Set up an alert if market gets to this
resistance level
Buy 7 day 210 put @ 2.58, exit harami @ 7.28 – 182% return
www.nisonoptionsacademy
Using Nison Candle Scanner software for Options:
Method 2- Finding markets at key support or resistance areas
NCS saved you from 8
days time value decay
www.candlecharts.com
45
Nison Candlestick Summit – Day 2
The 10 rules of Disciplined Trading and Investing
1. Don’t forget “candles in context”
2. If…then system
3. Stops – always use them
4. Consider options
5. Is any news expected?
Stay Away
from the
Trade
The 10 rules of Disciplined Trading and Investing
1. Don’t forget “candles in context”
2. If…then system
3. Stops – always use them
4. Consider options
5. Is any news expected?
6. Prevailing trend
www.candlecharts.com
46
Nison Candlestick Summit – Day 2
www.candlecharts.com
Prevailing Trend
20 day m.a over
50 day m.a and both
sloping up
1) Connect to data feed
2) Set up and save Western template chart with your favorite
indicators
3) Set up and save NCS market analyzer with row filter
NCS all off
NCS bull
NCS bear
4) Determine trend of overall market
5) Have both market analyzer and western template chart open side
by side
6) Based on trend of overall market using NCS on market analyzer to
scan for bull or bear signals.
7) Based on scan put that market into Western chart template
8) Analyze to determine if good trade or not
www.candlecharts.com
47
Nison Candlestick Summit – Day 2
The 10 rules of Disciplined Trading and Investing
1. Don’t forget “candles in context”
2. If…then system
3. Stops – always use them
4. Consider options
5. Is any news expected?
6. Prevailing trend
7. Let the market tell you what to do
Adapting
The low of the
bullish engulfing
pattern as
support. Once
hammer is formed
(at the arrow) we
then adjust our
support
www.candlecharts.com
The 10 rules of Disciplined Trading and Investing
1. Don’t forget “candles in context”
2. If…then system
3. Stops – always use them
4. Consider options
5. Is any news expected?
6. Prevailing trend
7. Let the market tell you what to do
8. Indicators – the more the better
www.candlecharts.com
48
Nison Candlestick Summit – Day 2
The Multiplier Effect
Where a Nison candle signal confirms another indicator
Nison Case Study
Two hammers picked up with NCS software at small arrows and
boxes (Note: only “hammer” was turned on in NCS)
d
e
a
1) Why is the line at the big arrow at b not a hammer?
2) Even though the candle detailed above is not a hammer, what
bullish signs are there ala’ shadows and real bodies at a,b and c
telling us?
f
3) What warns us of trouble at about d,e and f?
4) Would you buy at either of the two valid hammers? Why or why
not?
c
b
www.candlecharts.com
The 10 rules of Disciplined Trading and Investing
1. Don’t forget “candles in context”
2. If…then system
3. Stops – always use them
4. Consider options
5. Is any news expected?
6. Prevailing trend
7. Let the market tell you what to do
8. Indicators – the more the better
9. Never trade in the belief the market is wrong
www.candlecharts.com
49
Nison Candlestick Summit – Day 2
The 10 rules of Disciplined Trading and Investing
1. Don’t forget “candles in context”
2. If…then system
3. Stops – always use them
4. Consider options
5. Is any news expected?
6. Prevailing trend
7. Let the market tell you what to do
8. Indicators – the more the better
9. Never trade in the belief the market is wrong
10. Examine risk-reward
Always Check Risk – Reward
1. What is your price risk?
2. What is your target?
Do you have
a good
risk-reward?
www.candlecharts.com
Risk/Reward
www.candlecharts.com
www.candlecharts.com
50
Nison Candlestick Summit – Day 2
Which is a better sale? Part 1
Scenario 1
Scenario 2
Which is a better sale?- Part 2
Scenario 1
Scenario 2
Which is a better sale? Part 31
Scenario 1
www.candlecharts.com
Scenario 2
51
Nison Candlestick Summit – Day 2
Which is a Better
trading signal?
www.candlecharts.com
Risk/Reward
Dark Cloud Cover
Bearish
Engulfing
Pattern
www.candlecharts.com
Nison Case Study
Tell me about this signal re: candle signal, western
signal (hint- look at recent lows).
Would you go long on this signal? Why or why not?
www.candlecharts.com
www.candlecharts.com
52
Nison Candlestick Summit – Day 2
What would you do and why?
Nison candlesticks for option strategies
Bull engulf at support
- poor risk/reward
but can do this trade
with a special option
strategy
www.nisonoptionsacademy
Trading with Discipline
Don’t forget “candles in context”
If…then system
Stops – always use them
Consider options
Is any news expected?
Prevailing trend
Let the market tell you what to do
Indicators – the more the better
Never trade in the belief the market is wrong
Examine risk-reward
www.candlecharts.com
53
Nison Candlestick Summit – Day 2
Trading Journal







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 notes
What did you do right/wrong
Goal: Keeping emotions
out of your trading
Trading Journal - Setting up the Trade

Entry Price

Risk

Initial Target

Why did you do the trade?
www.candlecharts.com
Trading Journal - Analyzing the Trade

Entry Price

Risk

Initial Target

Why did you do the trade?

Exit Price

Analyze the trade
www.candlecharts.com
www.candlecharts.com
54
Nison Candlestick Summit – Day 2
Trading Journal - Setting up the Trade

Entry Price

Risk

Initial Target

Why did you do the trade?
Support from a few months ago
www.candlecharts.com
Trading Journal - Analyzing the Trade

Entry Price

Risk

Initial Target

Why did you do the trade

Exit Price?

Analyze the trade
www.candlecharts.com
Trading Journal - Analyzing the Trade

Entry Price

Risk

Initial Target

Why did you do the trade

Exit Price

Analyze the trade
www.candlecharts.com
www.candlecharts.com
55
Nison Candlestick Summit – Day 2
Steve recommends:
What would you do and why?
What would you do?
www.candlecharts.com
Part 1
Part 2
56
Nison Candlestick Summit – Day 2
What would you do?
Part 3
What would you do?
Part 4
What would you do?
Part 5
www.candlecharts.com
57
Nison Candlestick Summit – Day 2
Putting it all Together
Trading Checklist
 Use NCS
to find and confirm a valid Nison candlestick signal
candle confirm Western signal (i.e. ADX,
support/resistance, volume, or any of your favorites)
 Check longer term trend
 Is any news coming out?
 Determine risk/reward (remember many of the candle
signals can be used as a protective stop)
 Monitor trade (i.e. time or trailing stops, change in technical
picture, etc)
 Does
www.candlecharts.com
58