Japanese Candlesticks

In the 1600s, the Japanese developed a method of technical analysis to analyze the price of rice contracts. This technique is called candlestick charting. The interest in candlestick signal analysis in the United States is credited to Steve Nison. Over a period of 3 years ,after extensive research Steve came up with the publication "Japanese Candlestick Charting Techniques", published in 1991.
Candlestick charts display the open, high, low, and closing prices in a format similar to a modern-day bar-chart, but in a manner that extenuates the relationship between the opening and closing prices. Candlestick charts are simply a new way of looking at prices, they don't involve any calculations.


The interpretation of candlestick charts is based primarily on patterns. The most popular patterns are

Bullish Patterns

• Long white (empty) line
• Hammer
• Piercing line
• Bullish engulfing lines
• Morning Star
• Bullish doji star

Bearish Patterns

• Long black (filled-in) line.
• Hanging Man
• Dark cloud cover
• Bearish engulfing lines
• Evening star
• Doji Star
• Shooting Star

Reversal Patterns
Long-legged doji
Dragon-fly doji
Gravestone doji
star
Doji star.


Neutral Patterns

• Spinning tops.
• Doji
• Harami
• Harami Cross

Fibonacci Retracement Analysis

Fibonacci retracement analysis is a popular technical analysis tool, used by traders mainly to calculate targets for possible entry & exit points, and in determining possible support and resistance levels.It is based on the key numbers identified by mathematician Leonardo Fibonacci in the thirteenth century.The Fibonacci sequence of numbers is as follows: 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, etc. Each term in this sequence is simply the sum of the two preceding terms and sequence continues infinitely. One of the remarkable characteristics of this numerical sequence is that each number is approximately 1.618 times greater than the preceding number.


A Video which demonstrates how fibs can be used :