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8/9/2019 Vol 4 Handouts Opt 3
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S tev e N i s o n s C a n d l e s t i c k s R e -Ig n i ted A d v a n c e d Wo rk s h o p :
A d v a n c e d We s te rn a n d T ra d e Ma n a g em e n t w i th C an d l e s t i c k s
Volume 4 of the Nison Educational Series
www.candlecharts.com
Advanced
Western
Technical Tools
Founder and President: Candlecharts.com 212
Candlestick
Charting
Techniques
Western
Charting
Tools
Trade Management
213
214
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S tev e N i s o n s C a n d l e s t i c k s R e -Ig n i ted A d v a n c e d Wo rk s h o p :
A d v a n c e d We s te rn a n d T ra d e Ma n a g em e n t w i th C an d l e s t i c k s
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 a
sufficient reason for a new trade
216
www.candlecharts.com
East + West Confirmation
Where a candle
signal confirms a
Western technical
signal
217
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3
S tev e N i s o n s C a n d l e s t i c k s R e -Ig n i ted A d v a n c e d Wo rk s h o p :
A d v a n c e d We s te rn a n d T ra d e Ma n a g em e n t w i th C an d l e s t i c k s
Volume 4 of the Nison Educational Series
www.candlecharts.com
East + West = Greater Winning %
218
www.candlecharts.com
Candles plus..
219
www.candlecharts.com
Candles plus Bollinger Bands
220
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S tev e N i s o n s C a n d l e s t i c k s R e -Ig n i ted A d v a n c e d Wo rk s h o p :
A d v a n c e d We s te rn a n d T ra d e Ma n a g em e n t w i th C an d l e s t i c k s
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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S tev e N i s o n s C a n d l e s t i c k s R e -Ig n i ted A d v a n c e d Wo rk s h o p :
A d v a n c e d We s te rn a n d T ra d e Ma n a g em e n t w i th C an d l e s t i c k s
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
www.candlecharts.com
Stands for Average Directional Indicator
Shows how strongly a market is trending
Does not show direction of trend
228
www.candlecharts.com
Strong ADX with
prices in up trend. Strong ADX with
prices in down trend.
229
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S tev e N i s o n s C a n d l e s t i c k s R e -Ig n i ted A d v a n c e d Wo rk s h o p :
A d v a n c e d We s te rn a n d T ra d e Ma n a g em e n t w i th C an d l e s t i c k s
Volume 4 of the Nison Educational Series
www.candlecharts.com
1
2230
www.candlecharts.com
Some technical indicators, such as movingaverages,momentum trading, work better in strongly trendingmarkets.
Some technical indicators, such as oscillators, workbetter in non trending markets.
Traders check ADXto see if the technical indicatorthey use is in right trend environment
231
www.candlecharts.com
Use onlyon daily chartsexceptfor FX
Use only forentries
Lagging indicator
Slow torecognize a new trend
232
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S tev e N i s o n s C a n d l e s t i c k s R e -Ig n i ted A d v a n c e d Wo rk s h o p :
A d v a n c e d We s te rn a n d T ra d e Ma n a g em e n t w i th C an d l e s t i c k s
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 basishas 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
www.candlecharts.com
-.31
ADX at 20.64.
What do we need to
determine the slope
on this day?
ADX at20.96
Slope = 20.64-20.96 = -.32
ADX 22.04
ADX 24.11
Slope = 24.11-22.04 =+2.07
235
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S tev e N i s o n s C a n d l e s t i c k s R e -Ig n i ted A d v a n c e d Wo rk s h o p :
A d v a n c e d We s te rn a n d T ra d e Ma n a g em e n t w i th C an d l e s t i c k s
Volume 4 of the Nison Educational Series
www.candlecharts.com
14 Period
ADX slope
increasing
.5 or more
ADX:22.38
ADX:20.30
ADX:26.03
Slope = +2.08
What is the slope?
Strong uptrend?
ADX:27.56
236
www.candlecharts.com
Minimum:
14 Period
ADX slope
+.25 or
less
ADX:18.57
ADX:18.26
-.31
Strict: 14Period
ADX slope
decreasing
237
www.candlecharts.com
238
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S tev e N i s o n s C a n d l e s t i c k s R e -Ig n i ted A d v a n c e d Wo rk s h o p :
A d v a n c e d We s te rn a n d T ra d e Ma n a g em e n t w i th C an d l e s t i c k s
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
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?
241
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S tev e N i s o n s C a n d l e s t i c k s R e -Ig n i ted A d v a n c e d Wo rk s h o p :
A d v a n c e d We s te rn a n d T ra d e Ma n a g em e n t w i th C an d l e s t i c k s
Volume 4 of the Nison Educational Series
www.candlecharts.com
Minimum:14 Period
ADX slope
.25 or less
Strict: 14
Period
ADX slope
decreasing
-.10-.40
242
www.candlecharts.com
Bull shadows on descent. But
based on ADX which of these is
more likely a turn?
ADX slopes
2.24, 2.53, 2.67
Why didnt I
put ADX
numbers for
these?
243
www.candlecharts.com
ADX : 27.98
What candle patterns are at
the dashed arrows?
What is the ADX telling us?
ADX : 30.38
ADX : 31.80
244
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S tev e N i s o n s C a n d l e s t i c k s R e -Ig n i ted A d v a n c e d Wo rk s h o p :
A d v a n c e d We s te rn a n d T ra d e Ma n a g em e n t w i th C an d l e s t i c k s
Volume 4 of the Nison Educational Series
www.candlecharts.com
ADX:18.57
ADX:18.26
-.31
Strict: 14
Period
ADX slope
decreasing
+.95
Minimum:14 Period
ADX slope
+.25 or
less
245
www.candlecharts.com
Slope +.97
246
www.candlecharts.com
FOR BEAR CANDLEREVERSAL SIGNALS
Step 1 get candlesignal
Step 2 ADX showsuptrend easing orno trend:
ADX slopeincreases by
less than .25,and better ifslope isnegative
ADX:42.85
and 41.02
so slope is
-1.83
247
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S tev e N i s o n s C a n d l e s t i c k s R e -Ig n i ted A d v a n c e d Wo rk s h o p :
A d v a n c e d We s te rn a n d T ra d e Ma n a g em e n t w i th C an d l e s t i c k s
Volume 4 of the Nison Educational Series
www.candlecharts.com
FOR BULL CANDLE
REVERSAL SIGNALS
Step 1 get candlesignal
Step 2 ADX showsdowntrend easing or no
trend:
ADX slope increases
by less than .25, and
better if slope is
negative
ADX:
1-31.97
2-32.67
3-32.48
4-32.45
5-32.53
6-30.23
1
2
34
5
6
248
www.candlecharts.comFounder and President: Candlecharts.com 249
www.candlecharts.com
Gravestone doji at resistance
After the gravestone
where is a potential
target?
250
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S tev e N i s o n s C a n d l e s t i c k s R e -Ig n i ted A d v a n c e d Wo rk s h o p :
A d v a n c e d We s te rn a n d T ra d e Ma n a g em e n t w i th C an d l e s t i c k s
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
www.candlecharts.com
First
leg
target
Swing TargetSwing Target
252
www.candlecharts.com
East and West
Doji as signal to exit
253
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S tev e N i s o n s C a n d l e s t i c k s R e -Ig n i ted A d v a n c e d Wo rk s h o p :
A d v a n c e d We s te rn a n d T ra d e Ma n a g em e n t w i th C an d l e s t i c k s
Volume 4 of the Nison Educational Series
www.candlecharts.com
Becoming a Confident Trader
254
www.candlecharts.com
Head and ShouldersHead and Shoulders
Neckline
Left Shoulder Right
Shoulder
Head
Head and Shoulders Top
Sellsignal
255
Three Buddha Pattern
256
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S tev e N i s o n s C a n d l e s t i c k s R e -Ig n i ted A d v a n c e d Wo rk s h o p :
A d v a n c e d We s te rn a n d T ra d e Ma n a g em e n t w i th C an d l e s t i c k s
Volume 4 of the Nison Educational Series
www.candlecharts.com
We got the reversal here with
candles .
Compared to here with
a classic western signal
Why we are here!
257
www.candlecharts.com
1
2 3
Old support
becomes..
New resistance
How Education Saves You $$$$
1- Bear Harami2- Dark Cloud Cover3- Bearish Engulfing Pattern
258
neckline Interview
Head andShoulder top
T ASC Int erview - 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 i s broken, itshould becomeresistance.
2) To get a target with thehead and shoulders topwe measure from the topof the head to theneckline.
259
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S tev e N i s o n s C a n d l e s t i c k s R e -Ig n i ted A d v a n c e d Wo rk s h o p :
A d v a n c e d We s te rn a n d T ra d e Ma n a g em e n t w i th C an d l e s t i c k s
Volume 4 of the Nison Educational Series
STEVESFAVORITE
MEASURING TACTIC
260
www.candlecharts.com
Box Range BreakoutBox Range Breakout
261
www.candlecharts.com
Box range breakout
Harami with
target bottom of
box
262
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S tev e N i s o n s C a n d l e s t i c k s R e -Ig n i ted A d v a n c e d Wo rk s h o p :
A d v a n c e d We s te rn a n d T ra d e Ma n a g em e n t w i th C an d l e s t i c k s
Volume 4 of the Nison Educational Series
www.candlecharts.com
Box range Breakouts
263
www.candlecharts.com
East & West = Profits
264
www.candlecharts.com
Box range Breakout/ momentum trading
265
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S tev e N i s o n s C a n d l e s t i c k s R e -Ig n i ted A d v a n c e d Wo rk s h o p :
A d v a n c e d We s te rn a n d T ra d e Ma n a g em e n t w i th C an d l e s t i c k s
Volume 4 of the Nison Educational Series
www.candlecharts.com 266
www.candlecharts.com
Scenario1
Scenario2
The Tools of the West with
the Light of the Candles
The Tools of the West with
the Light of the Candles
267
www.candlecharts.com
The Nison Candlestick ScreenerThe Nison Candlestick Screener
Using candles at support or resistance
for the high probability trades
268
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S tev e N i s o n s C a n d l e s t i c k s R e -Ig n i ted A d v a n c e d Wo rk s h o p :
A d v a n c e d We s te rn a n d T ra d e Ma n a g em e n t w i th C an d l e s t i c k s
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
269
www.candlecharts.com
The Nison Candlestick Screener
270
www.candlecharts.com
The Nison Candlestick Screener
271
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S tev e N i s o n s C a n d l e s t i c k s R e -Ig n i ted A d v a n c e d Wo rk s h o p :
A d v a n c e d We s te rn a n d T ra d e Ma n a g em e n t w i th C an d l e s t i c k s
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
www.candlecharts.com
Major resistance 2.00-2.01
The Nison Candlestick Screener
273
www.candlecharts.com
Long term resistance zone
1) Is the at resistance?
2) Are there any candle signals
showing hesitation?
How education saves you $$$$
274
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S tev e N i s o n s C a n d l e s t i c k s R e -Ig n i ted A d v a n c e d Wo rk s h o p :
A d v a n c e d We s te rn a n d T ra d e Ma n a g em e n t w i th C an d l e s t i c k s
Volume 4 of the Nison Educational Series
www.candlecharts.com
The Value of Owning the Knowledge
Long term resistancezone
275
www.candlecharts.com
The Value of Owning the Knowledge
276
www.candlecharts.com
The Nison Candlestick Screener
277
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S tev e N i s o n s C a n d l e s t i c k s R e -Ig n i ted A d v a n c e d Wo rk s h o p :
A d v a n c e d We s te rn a n d T ra d e Ma n a g em e n t w i th C an d l e s t i c k s
Volume 4 of the Nison Educational Series
www.candlecharts.com
Near support?Any reversal signals yet?
The Nison Candlestick Screener
278
www.candlecharts.com
The Nison Candlestick Screener
279
Market refreshed
The Nison Candlestick Screener
Near resistance?Any reversal signals yet?
280
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S tev e N i s o n s C a n d l e s t i c k s R e -Ig n i ted A d v a n c e d Wo rk s h o p :
A d v a n c e d We s te rn a n d T ra d e Ma n a g em e n t w i th C an d l e s t i c k s
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 sectorsso why are sectors important to traders?
283
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S tev e N i s o n s C a n d l e s t i c k s R e -Ig n i ted A d v a n c e d Wo rk s h o p :
A d v a n c e d We s te rn a n d T ra d e Ma n a g em e n t w i th C an d l e s t i c k s
Volume 4 of the Nison Educational Series
www.candlecharts.com
Candles and Sectors
284
www.candlecharts.com
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
www.candlecharts.com
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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S tev e N i s o n s C a n d l e s t i c k s R e -Ig n i ted A d v a n c e d Wo rk s h o p :
A d v a n c e d We s te rn a n d T ra d e Ma n a g em e n t w i th C an d l e s t i c k s
Volume 4 of the Nison Educational Series
www.candlecharts.com
Bottom Up Sector Analysis
290
www.candlecharts.com
Biotech Sector
AMGN Sept. 11Buy ?
Bottom Up Sector Analysis
291
www.candlecharts.com
Sept.11
Buy
Bottom Up Sector Analysis
292
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S tev e N i s o n s C a n d l e s t i c k s R e -Ig n i ted A d v a n c e d Wo rk s h o p :
A d v a n c e d We s te rn a n d T ra d e Ma n a g em e n t w i th C an d l e s t i c k s
Volume 4 of the Nison Educational Series
www.candlecharts.com 293
www.candlecharts.com
e ng up scann ng pages orNison Sector Analyses
294
www.candlecharts.com
Scanning with Nison Candle Sector Analyses
STEP 1 Scan Sectors
Aug. 16
Internets Banks Biotech
Gold- Silver Semis Retail
295
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S tev e N i s o n s C a n d l e s t i c k s R e -Ig n i ted A d v a n c e d Wo rk s h o p :
A d v a n c e d We s te rn a n d T ra d e Ma n a g em e n t w i th C an d l e s t i c k s
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
www.candlecharts.com
Golden and Dead Crosses
Dark cloud confirming resistance
Hammers
Bullsash
patterns
Analyze and Trade ETFs like any other mark et
300
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n ows an s
301
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S tev e N i s o n s C a n d l e s t i c k s R e -Ig n i ted A d v a n c e d Wo rk s h o p :
A d v a n c e d We s te rn a n d T ra d e Ma n a g em e n t w i th C an d l e s t i c k s
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
Fin d best stocks in those sectors
Analyze those stocks
ETFs Ability to trade sectors
Instant diversification
302
www.candlecharts.comFounder and President: Candlecharts.com 303
www.candlecharts.com
3
Market Chameleon
Candles in Context
Risk-reward
Exit Strategies
Trade Management
304
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S tev e N i s o n s C a n d l e s t i c k s R e -Ig n i ted A d v a n c e d Wo rk s h o p :
A d v a n c e d We s te rn a n d T ra d e Ma n a g em e n t w i th C an d l e s t i c k s
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
anything
different?
306
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Adapting to the Market
Target
307
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S tev e N i s o n s C a n d l e s t i c k s R e -Ig n i ted A d v a n c e d Wo rk s h o p :
A d v a n c e d We s te rn a n d T ra d e Ma n a g em e n t w i th C an d l e s t i c k s
Volume 4 of the Nison Educational Series
www.candlecharts.com
Adapting to the market
Wheressupport?
Wheres
supportnow?
311
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Become a Market Chameleon
Bear
Stearns
Collapse
312
www.candlecharts.com
Candles in Context
Analyzing candle
signals within the
context of
surrounding
technical picture
313
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S tev e N i s o n s C a n d l e s t i c k s R e -Ig n i ted A d v a n c e d Wo rk s h o p :
A d v a n c e d We s te rn a n d T ra d e Ma n a g em e n t w i th C an d l e s t i c k s
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
www.candlecharts.com
Which is a Better
trading signal?
316
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S tev e N i s o n s C a n d l e s t i c k s R e -Ig n i ted A d v a n c e d Wo rk s h o p :
A d v a n c e d We s te rn a n d T ra d e Ma n a g em e n t w i th C an d l e s t i c k s
Volume 4 of the Nison Educational Series
www.candlecharts.com
Dark Cloud Cover
Bearish
Engulfing
Pattern
Candles in Context
317
Which is a bettertrading signal?
Hammer Morning Star318
www.candlecharts.com
Hammer
Morning Star
Candles in Context
319
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S tev e N i s o n s C a n d l e s t i c k s R e -Ig n i ted A d v a n c e d Wo rk s h o p :
A d v a n c e d We s te rn a n d T ra d e Ma n a g em e n t w i th C an d l e s t i c k s
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
www.candlecharts.com
Risk/Reward
321
www.candlecharts.com
Waiting for time to ripenClassic bearish
engulfing pattern:
But whatabout
risk/reward aspect?
322
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S tev e N i s o n s C a n d l e s t i c k s R e -Ig n i ted A d v a n c e d Wo rk s h o p :
A d v a n c e d We s te rn a n d T ra d e Ma n a g em e n t w i th C an d l e s t i c k s
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!
Looks
promising at
the white
candles
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Volume 4 of the Nison Educational Series
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Hammer
Closed under support
How Education Saves you $$$$
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Hammer
How Education Saves you $$$$
330
Exit Strategies
Protective Stops
Time Stops
Trailing Stops
SteveNi sonsCandlecharts.com 331
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Volume 4 of the Nison Educational Series
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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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A d v a n c e d We s te rn a n d T ra d e Ma n a g em e n t w i th C an d l e s t i c k s
Volume 4 of the Nison Educational Series
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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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Volume 4 of the Nison Educational Series
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Trailing stops - letting the profits run
Falling
window
I usually exit, itcorrects somewhat
but then continues
to go in the original
direction after that.
Shooting
Star
You sold at shooting star or
falling window. A rally from a
bull harami gets you nervous
and you exit.But youre still
playing with the markets
money- so another option:
trailing stop.
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Falling window
Shooting
Star
Where you got nervous
Trailing stops - letting the profits run
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Letting Profits Run
Buy and set
protective stop
Shooting star
Could take some
or all profits here
Or use dead cross
as your trailing
stop and would
thus exit here
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Volume 4 of the Nison Educational Series
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Trailing Stops to let profits run
Buy and set
protective stop
Potential Target
Now at target-Doji warns of
caution. But you
want to let
profits run.
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Trailing Stops to let profits run
doji
345
Exit Strategies
Protective Stops
Time Stops
Trailing Stops
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Volume 4 of the Nison Educational Series
Trading Journal(setting up the Trade)
Goal: Keeping emotions
out 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 notes
What 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 notes
What 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?
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Volume 4 of the Nison Educational Series
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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
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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
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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
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Volume 4 of the Nison Educational Series
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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
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Putting it all Together
Trading ChecklistTrading Checklist
Have VALID Candle signal (if not sure-
confirm with Nison candlestick
recognition software)
Does candle co nfirm Western signal (i.e.
ADX, support/resistance, volume, or any
of your favorites)
Stock traders check sector
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)
Use Trade Journal