Steve Nison - Japanese Candlestick Charting Techniques: A Contemporary Guide to the Ancient Investment Techniques of the Far East, Second Edition

JAPANESE
CANDLESTICK
CHARTING
TECHNIQUES

A CONTEMPORARY GUIDE TO THE
ANCIENT INVESTMENT
TECHNIQUES OF THE FAR EAST

SECOND EDITION

STEVE NISON

NEW YORK INSTITUTE OF FINANCE

NYIF and NEW YORK INSTITUTE OF FINANCE are trademarks of Executive

Tax Reports, Inc., used under license by Penguin Putnam Inc.

This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought.

From the Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations

Copyright 2001 by Steve Nison

All rights reserved. No part of this book may be reproduced in any form or by any means, without permission in writing from the publisher.

Library of Congress Cataloging-in-Publication Data

Nison, Steve.

Japanese candlestick charting techniques : a contemporary guide to the ancient investment techniques of the Far East / Steve Nison.2nd ed.

p. cm.

Includes bibliographical references and index.

ISBN: 978-1-101-65978-6

1. StocksCharts, diagrams, etc. 2. Investment analysis. I. Title.

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A clever hawk hides it claws.

I ts hard to believe that Japanese candlestick charts, the claws of Japanese technical analysis, were completely unknown to the Western world before I revealed them to the Western hemisphere in 1989. Candlestick charts are now so prevalent that it is hard to imagine that before the first edition of this book, no one in the West knew about these wonderful techniques and not one charting service had candlestick charts. This is amazing to me, considering that candlestick charts are now available on almost every charting service.

I am proud to say that Japanese Candlestick Charting Techniques quickly became the foundation of all candlestick charting work in the West. The first edition of this book is why you now have candlestick charts on the Internet and anywhere else they are available. Illustrating the universal popularity and effectiveness of candle charts, the book has been translated into six languages and has gone through thirteen printings.

The tools, techniques, and topics offered in the first edition of this book are ageless and useable in all markets and time frames. But through cogent logic (and holding my dog hostage!) the editor of this edition convinced me it was time for a new edition.

Some of the fresh aspects of this book include updated charts, more equity markets, a focus on active trading via intraday charts, new refinements and strategies, and fresh combinations of Western technical analysis with candlestick charting tools.

In a public seminar, I asked the audience to write what they hoped to get from the seminar. Someone wrote, To make big $$$. While I cant guarantee big $$$ I expect that the tools, strategies, and techniques in this book will go a long way to improve your trading and decrease risk exposure.

Thank you for making the first edition of this book so popular. I know you will find this one as valuable, practical, and entertaining.

I would enjoy hearing your comments, experiences, and ideas with candle charts. I welcome your e-mail at info@candlecharts.com and invite you to visit our site at www.candlecharts.com. While I cant guarantee a reply, all your e-mails and letters will be read.

Do not forget little kindnesses and do not remember small faults.

I want to thank all of you who have helped ignite the flames of interest in candle charts. The overwhelmingly positive feedback keeps the lights of the candles growing ever brighter.

To my institutional and public seminar attendees, advisory clients, and online clients, I want to thank you for your continued support and kind words.

A Japanese proverb says that, One evenings conversation with a superior man is better than ten years of study. It is my pleasure to acknowledge the superior men and women who have so generously helped me.

Many of those who deserve recognition for their help are mentioned in . There are others whom I would like to thank for their help in lighting my path. There were so many who contributed to this project that if I have forgotten to mention anyone I apologize for this oversight.

The underpinnings for all my research on candles are the translations provided by Richard Solberg. His acquisitions of the Japanese candle charting books, his ideas, and his work provided the scaffolding for the rest of my candle endeavors.

The Market Technicians Association (MTA) deserves special mention. It was at the MTAs library that I first discovered candle material written in English. This material, albeit scant, was extremely difficult to obtain, but the marvelously complete MTA library had it.

Yoji Inata spent many hours answering my more advanced questions. He was also kind enough to contact his peers in Japan to get more detailed answers if necessary.

The Nippon Technical Analysts Association (NTAA) deserves utmost praise for their assistance. Mr. Kojiiro Watanabe helped me to contact NTAA members who have been especially helpful. They are: Mr. Minoru Eda and Mr. Yasushi Hayashi Nori Hayashi.

There are many candle charting software programs available. For this book I used two of what I consider the best: Aspen Graphics (www.Aspenres.com) and CQG (www.cqg.com). Their products and support are top-notch.

Just as I did in the first edition, I again want to thank idea a day Bruce Kamich. Bruce is a friend and a fellow technician with over 25 years experience. He continues to provide many valuable ideas and suggestions.