You will have to decide these answers based on your trading temperment, your risk adversity, and your market philosophy. Yet the markets are influenced at times, to a major extent, by emotionalism. This item can be sent to United Statesbut the seller has not specified postage options. Since they are a market moving factor, they should be watched. I spent the next few years exploring, researching, and analyzing anything I could about candlestick charts. The Japanese Chart of Charts Reading it was like finding an oasis in a desert.
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Probably, many more cf you have not. In December , I wrote an introductory article on candlesticks that precipitated an immediate groundswell of interest. It turned out that I was one of the few Americans familiar with this centuries-old Japanese technique. I wrote follow-up articles, gave numerous presentations, taught classes, and was interviewed on television and by newspapers across the country.
In early , I wrote a short reference piece for my Chartered Market Technician thesis about candlestick charts. It contained very basic introductory material, but it was the only readily available information on candlestick charts in the United States. This handout became very popular. Within a few months, Merrill Lynch, the publisher of the booklet, received over 10, requests.
Was it the lack of information in the United States? I was fortunate in several ways. Perhaps my perseverance and serendipity were the unique combination needed that others did not have. In , I became acquainted with a Japanese broker. One day, while I was with her in her office, she was looking at one of her Japanese stock chart books Japanese chart books are in candlestick form. She exclaimed, "look, a window. She told me a window was the same as a gap in Western technicals. She went on to explain that while Western technicians use the expression "filling in the gap" the Japanese would say "closing the window.
I spent the next few years exploring, researching, and analyzing anything I could about candlestick charts. It was not easy. There are scant English publications on the subject. My initial education was with the help of a Japanese broker and through drawing and analyzing candlestick charts on my own.
It was a Japanese booklet which had been translated into English. Unfortunately, there were just ten pages on interpreting candlestick charts. Nonetheless, I finally had some English candlestick material. A few months later, I borrowed a book that has had a major influence on my professional life.
It contains about 70 pages on candlestick charts and is written in English. Reading it was like finding an oasis in a desert. As I discovered, while the book yielded a harvest of information, it took some effort and time to get comfortable with its concepts. They were all so new. I also had to become comfortable with the Japanese terminology. The writing style was sometimes obscure. Part of this might have resulted from the translation. The book was originally written in Japanese about 25 years ago for a Japanese audience.
I also found out, when I had my own material translated, that it is dreadfully difficult to translate such a specialized subject from Japanese to English. Nonetheless, I had some written reference material. This book became my "Rosetta Stone. I chewed and grinded away at the new ideas and terminology. I was fortunate in another sense. I had the help of the author, Seiki Shimizu , to answer my many questions. Although Mr. Shimizu does not speak English, the translator of the book, Greg Nicholson, graciously acted as our intermediary via fax messages.
The Japanese Chart of Charts provided the foundation for the rest of my investigation into candlesticks. Without that book, this book would not have been possible.
In order to continually develop my abilities in candlestick charting techniques, I sought out Japanese candlestick practitioners who would have the time and inclination to speak with me about the subject. I met a Japanese trader, Morihiko Goto who had been using candlestick charts and who was willing to share his valuable time and insights.
This was exciting enough! Then he told me that his family had been using candlestick charts for generations! We spent many hours discussing the history and the uses of candlestick charts. He was an invaluable storehouse of knowledge. I also had an extensive amount of Japanese candlestick literature translated. Obtaining the original Japanese candlestick information was one problem.
Getting it translated was another. The director, Richard Solberg, provided indispensable help to this project. He was a rarity. He was an American fluent in Japanese who understood, and used, technical analysis. Not only did Richard do a wonderful job of translating, but he helped me hunt down and obtain Japanese candlestick literature. Thanks to his help I might have the largest collection of Japanese books on candlesticks in the country.
Without Richard this book would have been much less extensive. Before my introductory article on candlestick charts appeared in late , there were few services offering candlestick charts in the United States. Now a plethora cf services offer these charts. By the time you read this book, there probably will be additional services providing candlestick charts. Their popularity grows stronger every day.
The profusion of services offering the candlestick charts attests to both their popularity and their usefulness. I have had calls and faxs from around the world requesting more information about candlestick techniques. Why the extensive interest? There are many reasons and a few are: 1. Candlestick charts are flexible. Users run the spectrum from first-time chartists to seasoned professionals. This is because candlestick charts can be used alone or in combination with other technical analysis techniques.
A significant advantage attributed to candlestick charting techniques is that these techniques can be used in addition to, not instead of, other technical tools. I am not trying to convince veteran technicians that this system is superior to whatever else they may be using. That is not my claim. My claim is that candlestick charting techniques provide an extra dimension of analysis. Candlestick charting techniques are for the most part unused in the United States. Yet, this technical approach enjoys a centuries-old tradition in the Far East, a tradition which has evolved from centuries of trial and error.
Then there are the picturesque terms used to describe the patterns. Would the expression "hanging-man line" spark your interest? This is only one example of how Japanese terminology gives candlesticks a flavor all their own and, once you get a taste, you will not be able to do without them.
The Japanese probably know all the Western methods of technical analysis, yet we know almost nothing about theirs. Now it is our turn to benefit from their knowledge.
The Japanese use a combination of candlestick charting techniques along with Western technical tools. The primary reason for the widespread attention aroused by candlestick charts is that using them instead of, or in addition to, bar charts is a win-win situation. As we will see in Chapter 3 on drawing candlestick lines, the same data is required in order to draw the candlestick charts as that which is needed for our bar charts that is, the open, high, low, and close.
This is very significant since it means that any of the technical analysis used with bar charting such as moving averages, trendlines, Elliott Wave, retracements, and so on can be employed with candlestick charts. But, and this is the key point, candlestick charts can send signals not available from bar charts. In addition, there are some patterns that may allow you to get the jump on those who use traditional Western charting techniques.
By employing candlestick charting instead of bar charting you have the ability to use all the same analyses as you would with bar charting. But candlestick charts provide a unique avenue of analysis not available anywhere else. Part I of the book reveals the basics on constructing, reading, and interpreting over 50 candlestick chart lines and patterns.
Part II explains how to meld candlestick charts with Western technical analysis techniques. This is where the true power of candlecharts is manifested. This is how I use them. I have drawn illustrations of candlestick patterns to assist in the educational process. These illustrations are representative examples only. The drawn exhibits should be viewed in the context that they show certain guidelines and principles. The actual patterns do not have to look exactly as they do in the exhibits in order to provide the reader with a valid signal.
This is emphasized throughout the book in the many chart examples. Thus, there is some subjectivity in deciding whether a certain candlestick formation meets the guidelines for that particular formation, but this subjectivity is no different than that used with other charting techniques. You will have to decide these answers based on your trading temperment, your risk adversity, and your market philosophy. Likewise, through text, illustrations and real examples I will provide the general principles and guidelines for recognizing the candlestick formations.
The Japanese chart of charts
THE JAPANESE CHART OF CHARTS BY SEIKI SHIMIZU PDF DOWNLOAD
The Japanese Chart of Charts by Shimizu Seiki