Mj,
Candlesticks are useful because once you learn how to read them they help you determine the pyschology of traders as it relates to a specfic stock. They show you what traders are thinking.
Candlesticks and candlestick patterns fall into two categories - continuation and reversal. Continuation patterns show strength and indicate that a stock will probably continue it's trend. Reversals are warnings the the trend is probably about to change.
Individual candlesticks are variations of one of two types - the white or black marubozu (long white or black candle) which indicates strong buying or selling pressure or the doji which indicates indecision. The marubozu family consists of true marubozus which are long white or black candles with no wicks and quasi maribozu candles which have wicks of varying lengths. These signify strength. The doji family consists of a true doji, spinning top, dragonfly, tombstone, hammer, hanging man, etc. and usually indicate indecision and possible reversal.
I'd recommend starting with these patterns -
http://www.candlestickforum.com/PPF/Parameters/16_332_/candlestick.asp - they are the most common and the ones that will make you the most money.
I'd highly recommend 'Candlestick Charting Explained' by Greg Morris. He was a student of Steve Nisons. He boils this down into one short book that teaches you how to start looking at the physcology and how to blend multiple candles into one candle so you don't have to memorize hundreds of patterns. You can probably pick this up used on amazon for under 20 bucks.
RB.
Topic: Japaness candlestick help! (Read 13697 times)
