As a new and exciting dimension of technical analysis, Japanese candlestick
charting and candle pattern analysis will help people who
wish to have another tool at their disposal; this tool will help sort and
control the constant disruptions and continuous outside influences
on sound stock and futures market analysis.
What does candlestick charting offer that typical Western highlow
bar charts do not? As far as actual data displayed—nothing.
However, when it comes to visual appeal and the ability to see data
relationships easier, candlesticks are exceptional. A quick insight to
the recent trading psychology is there before you. After a minimal
amount of practice and familiarization, candlesticks will become part
of your analysis arsenal. You may never return to a standard bar
chart.
Japanese candlesticks offer a quick picture into the psychology of
short-term trading, studying the effect, not the cause. This places candlesticks
squarely in the category of technical analysis. One cannot
ignore the fact that prices are influenced by investors’ psychologically
driven emotions of fear, greed, and hope. The overall psychology of
the marketplace cannot be measured by statistics; some form of technical
analysis must be used to analyze the changes in these psychological
factors. Japanese candlesticks read the changes in the makeup of
investors’ interpretations of value. This is then reflected in price movement. More than just a method of pattern recognition, candlesticks
show the interactions between buyers and sellers. Japanese candlestick
charting provides insight into the financial markets that is not
readily available with other charting methods. It works well with
either stocks or commodities. Related analysis techniques, such as
candlestick filtering and CandlePower (candle volume) charting, will
add to your analysis and timing capabilities.
This book not only will serve as a complete guide to Japanese candlestick
charting and candle pattern analysis, but will also provide conclusive
evidence of the usefulness of candlestick patterns as an analysis
tool. All methods of analysis and all assumptions will be opened and
unobstructed. You will, after reading this book, either begin to use candlesticks
to assist in your market analysis and timing or be confident
JAPANESE CANDLESTICKS AND YOU
Once you become accustomed to using candlestick charts, you will
find it disconcerting to be limited to a standard bar chart. Without
candlesticks, you will feel that you are not seeing the complete picture—that
something is missing. Besides providing the quick and
easy pattern recognition, candlesticks have great visual appeal. The
data relationships almost jump off the page (or computer screen),
hardly the case with bar charts enough in them to further your own research into candlestick analysis.
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