Reading Charts 2 “IT’S TIME TO GET MORE OUT OF LIFE”
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Copyright © 2007 Stephen Margison www.sm-forex.com
The Forex Codes
Japanese Candlesticks (intro)
Copyright Š 2007 Stephen Margison www.sm-forex.com
The Forex Codes
Japanese Candlesticks (intro)
• The Japanese began using technical analysis to trade rice in the 17th century. Candlestick charting first appeared sometime after 1850 • Long bodies indicate strong buying or selling and a faster move. The faster buying or selling activity occurs, the longer the body becomes. Copyright © 2007 Stephen Margison www.sm-forex.com
The Forex Codes
Japanese Candlesticks (intro)
Copyright Š 2007 Stephen Margison www.sm-forex.com
The Forex Codes
Japanese Candlesticks (intro)
Copyright Š 2007 Stephen Margison www.sm-forex.com
The Forex Codes
Japanese Candlesticks
• Useful for identifying Reversals • Good “tool in the box” for Bounce trading • Not to be used as a stand alone indicator • Psychological depiction of trader mentality at the time Copyright © 2007 Stephen Margison www.sm-forex.com
The Forex Codes
Japanese Candles – Hanging Man
Copyright © 2007 Stephen Margison www.sm-forex.com
The Forex Codes
Japanese Candlesticks
Copyright Š 2007 Stephen Margison www.sm-forex.com
The Forex Codes
Japanese Candlesticks
Copyright Š 2007 Stephen Margison www.sm-forex.com
The Forex Codes
Japanese Candles – Hammer
Copyright © 2007 Stephen Margison www.sm-forex.com
The Forex Codes
Japanese Candlesticks
Copyright Š 2007 Stephen Margison www.sm-forex.com
The Forex Codes
Japanese Candlesticks
Copyright Š 2007 Stephen Margison www.sm-forex.com
The Forex Codes
Japanese Candlesticks
Copyright Š 2007 Stephen Margison www.sm-forex.com
The Forex Codes
Japanese Candles – Inverted Hammer
Copyright © 2007 Stephen Margison www.sm-forex.com
The Forex Codes
Japanese Candlesticks
Copyright Š 2007 Stephen Margison www.sm-forex.com
The Forex Codes
Japanese Candlesticks
Copyright Š 2007 Stephen Margison www.sm-forex.com
The Forex Codes
Japanese Candlesticks
Copyright Š 2007 Stephen Margison www.sm-forex.com
The Forex Codes
Japanese Candlesticks
Copyright Š 2007 Stephen Margison www.sm-forex.com
The Forex Codes
Japanese Candles – Railroad Tracks • Railroad Tracks are one of the strongest patterns there is • A trend comes to a halt with a tall bar with long real body and little or no shadow and is followed by a similar tall bar going the other way • This pattern shows many traders feel the market should reverse Copyright © 2007 Stephen Margison www.sm-forex.com
The Forex Codes
Japanese Candlesticks
Copyright Š 2007 Stephen Margison www.sm-forex.com
The Forex Codes
Japanese Candles – Doji • A Doji indicates indecision in the market and struggle between bulls and bears • Open and close prices are the same or nearly the same • Four main types Of Doji Copyright © 2007 Stephen Margison www.sm-forex.com
The Forex Codes
Japanese Candlesticks
Copyright Š 2007 Stephen Margison www.sm-forex.com
The Forex Codes
Japanese Candlesticks
Copyright Š 2007 Stephen Margison www.sm-forex.com
The Forex Codes
Japanese Candlesticks
Copyright Š 2007 Stephen Margison www.sm-forex.com
The Forex Codes
Japanese Candlesticks
Copyright Š 2007 Stephen Margison www.sm-forex.com
The Forex Codes
Japanese Candlesticks
Copyright Š 2007 Stephen Margison www.sm-forex.com
The Forex Codes
Japanese Candlesticks
Copyright Š 2007 Stephen Margison www.sm-forex.com
The Forex Codes
Japanese Candlesticks
Copyright Š 2007 Stephen Margison www.sm-forex.com
The Forex Codes
Japanese Candles – Tweezer Tops
Copyright © 2007 Stephen Margison www.sm-forex.com
The Forex Codes
Japanese Candles – Tweezer Bottoms
Copyright © 2007 Stephen Margison www.sm-forex.com
The Forex Codes
Japanese Candles – Spinning Tops • When a trend is running out of momentum, its exhaustion is shown by short real body candles • In a “Spinning Top” price opens and closes near to the middle of the candle leaving little real body • The shadows on these candles can be quite long and about the same length Copyright © 2007 Stephen Margison www.sm-forex.com
The Forex Codes
Japanese Candlesticks
Copyright Š 2007 Stephen Margison www.sm-forex.com
The Forex Codes Trendlines
•
A trendline is a good way to show S and R
•
Price action can only do one of two things:
1. It can break through the trendline 2. It can bounce off the trendline Copyright © 2007 Stephen Margison www.sm-forex.com
The Forex Codes Trendlines
Copyright Š 2007 Stephen Margison www.sm-forex.com
The Forex Codes Trendlines
Copyright Š 2007 Stephen Margison www.sm-forex.com
The Forex Codes Trendlines
Copyright Š 2007 Stephen Margison www.sm-forex.com
The Forex Codes Channels
• Parallel Support and Resistance Trendlines with the price action enclosed • It is possible to trade bounces within the channel or breakouts out of the channel • Pick simple formations – be obvious • VERY POWERFUL for trading Copyright © 2007 Stephen Margison www.sm-forex.com
The Forex Codes Channels
Copyright Š 2007 Stephen Margison www.sm-forex.com
The Forex Codes Channels
Copyright Š 2007 Stephen Margison www.sm-forex.com
The Forex Codes Channels
Copyright Š 2007 Stephen Margison www.sm-forex.com
The Forex Codes Channels
Copyright Š 2007 Stephen Margison www.sm-forex.com
Reading Charts 2 “IT’S TIME TO GET MORE OUT OF LIFE”
www.sm-forex.com
Copyright © 2007 Stephen Margison www.sm-forex.com