Profitable Candlestick Trading: Pinpointing Market Opportunities to Maximize Profits (Wiley Trading)

Copyright 2011 by Stephen W. Bigalow. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

First edition 2001.

Published simultaneously in Canada.

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Library of Congress Cataloging-in-Publication Data:

Bigalow, Stephen.
Profitable candlestick trading : pinpointing market opportunities to maximize profits / Stephen W. Bigalow. 2nd ed.
p. cm. (Wiley trading series)
Includes index.
ISBN 978-0-470-92470-9 (cloth)
1. StocksCharts, diagrams, etc. 2. Investment analysis. 3. StocksPricesJapanCharts, diagrams, etc. I. Title.
HG4638.B54 2011
332.63222021dc22
2010036016

Preface to the New Edition

Japanese Candlestick charting and analysis is one of the most effective technical methodologies in the universe of technical analysis. This has proven to be truer with more research and investigation since the first publication of this book 10 years ago. The same problems that appeared to keep the Candlestick method out of the limelight back then have persisted to make Candlesticks still a fairly underused method today. Through the years, the number of people who have become proficient users of Candlestick analysis had been minimal, but now there is a small core of Candlestick investors that consistently improve techniques that make Candlestick signals work better. Nearly three decades of using the signals have produced two basic revelations: the signals are extremely accurate, and it is unusual that more people have not become advocates of the technique.

The Candlestick Trading Forum web site has been instrumental in educating investors and showing them how to use the candlestick signals correctly. A decade ago it was evident that one of the most powerful investment techniques has been sitting in front of the U.S. investment community, yet it has not exploded in popularity as one would expect. There is a definite perception about Candlestick trading. It is seen as requiring a long time to learn and become proficient. That is the major reason the majority of investors have stayed away from Candlesticks. That misconception is what spurred the original writing of this book. The Candlestick Trading Forum has become one of the leading web sites in teaching investors how to quickly learn the common-sense aspects of Candlestick analysis. The past decade has shown great improvements in the accuracy of Candlestick signals. The original publication of this book developed a community of investors who have worked well and continue to work well in researching and identifying confirming indicators that improve the results from Candlestick analysis. Other books on the topic were written nearly two decades ago. Those books were informational and well written, but they were published in a vacuum. Once the books were read, each investor was out there on her own. The number of people to confer with after first becoming exposed to the Candlestick method was minimal. The ideas were new in the United States, and there were few places to turn to for guidance.

For the past three decades, most investors have been aware of Candlesticks. The most common statement is They know about Candlesticks; they just dont know how they work. An extremely high percentage of chart followers have the Candlestick formations on their charts versus the standard bar charts. This is due to the favorable visual impact. The illustrative properties of the Candlestick chart make viewing much easier.

Four hundred years of research by successful Japanese rice traders constituted the inception of statistical analysis. What may take computers one afternoon to perform, the Japanese rice traders assembled over centuries of time. However, there is a definite benefit involved with human interpretation of these signals. The Japanese traders were able to describe the investor sentiment behind the formation of the signals. This becomes an extremely powerful asset for exploiting profits from markets that involve human emotions.

Being thoroughly convinced that Candlestick analysis surpasses all other technical analysis induced me to eliminate the misperceptions. Japanese Candlestick analysis is definitely not a passing fad. It is here to stay and effectively extracts profits from the trading marketsprofits for those who take the little time required to become acquainted with the Candlestick thinking process.

Not only does the knowledge of what a signal looks like benefit the Candlestick-educated investor, but learning the common-sense psychology that formed the signal provides the investor with a whole new perspective into successful investing. Somebody is making huge profits in the markets. It is not what the conventional wisdom advocates: Buy and hold. The big winners are those who have developed successful methods for interpreting when to buy and sell. Candlestick analysis is that method. Read this book, and your investment abilities will be forever improved, improved to the point of not just constantly exceeding market averages, but being able to exploit the indications of the signals to amass extraordinary profits.

Once you learn the Japanese Candlestick technique, your understanding of how investment markets work will dramatically alter your investment psychology. The probabilities of producing magnificent profits will always be in your favor. Learn Candlesticks and reap the knowledge that has led to centuries of successful trading.