#Steve nison net worth how to#

(This definition is different than in the West, where a down day is a day in which the close is lower than the previous close.) A large body (in relative terms) indicates strength in the direction of the trend, and a small body indicates indecision and a potential reversal, especially after a meaningful prior trend. A black body denotes, therefore, a вЂњdownвЂќ day, and a white body indicates an вЂњupвЂќ day. The real body is a heavy color, such as black, when the close is lower than the open, and usually white when the close is higher than the open. A long shadow indicates the inability for prices to maintain their highs or lows and is, thus, a warning of trouble. The вЂњshadowвЂќ is the vertical line from the real body up to the price high and down to the price low. In candlestick charts, the вЂњreal bodyвЂќ is the wider area between the open and close. Western traders have recognized the importance of the opening and close, but bar charts treat them without special weighting. The principal analytical difference between candlestick patterns and Western bar patterns is the emphasis on the opening and close. The best resource on candlesticks is Japanese Candlestick Charting Techniques by Steve Nison (2001), the person who introduced this ancient method to the West. Their disadvantage is that one must wait for the close before a pattern can be recognized, and they are useless in markets that do not accurately report the opening prices. They are generally reversal patterns and can reveal price reversals early in overbought or oversold conditions, at trend lines, or at support or resistance levels. Many patterns have their Western equivalents that we have seen before.

These patterns are mostly short term of only one to five bars, and by themselves they have not tested well. One advantage of the candlestick chart is that it can still use the Western methods of analysis-patterns, trend lines, support, and resistance-yet it has a set of unique patterns of its own. The candlestick chart has become popular because it represents price action in a more striking way furthermore, the patterns that result have interesting and novel names. As you will recall, the raw data used in the candlestick chart is the same as the raw data used in the bar chart: open, close, high, and low price per specific period.

#Steve nison net worth how to#

In Chapter 11, вЂњHistory and Construction of Charts,вЂќ we learned how to construct a candlestick chart. If interested, you can continue to experiment on your own.

The point in this exercise, however, is to demonstrate the many ways that prices are analyzed over the short term. Others include performance around national holidays, days of the week, time during the day, and even the new moon. We have only touched the edge of methods being used. Although there appears to be value in short-term patterns, they are not immediate sources of wealth without study, experience, and trial-and-error testing.