What will the reader find in this book?

As already mentioned, the first part of the book is devoted to the construction and interpretation of more than 50 varieties of candlesticks and candlestick patterns, and the second one tells how to combine different methods of technical analysis with each other - it is with this approach that the full power of candlestick charts is revealed, and this is exactly what I do. myself. Keep in mind that the diagrams of the candles that you will see in the illustrations are just samples to help you learn the material faster. The appearance of the same candles and patterns on real charts may differ slightly from the ideal, which does not prevent them from giving reliable market signals. You will see this in the many examples I give throughout the book. When you decide whether this or that candlestick pattern has formed on the chart or not, you will always act somewhat subjectively. But the same can be said about any other method of technical analysis. For example, should the $400 support level be considered broken if the futures price falls below this level within a day, or should we wait until the close of trading first? And if the closing price does not reach $400 symbolic 10 cents, will it break through the level or not? The answers to these questions depend on the temperament of the trader, his market philosophy and risk appetite. So it is here: the samples and examples in this book will help you learn the basic principles of recognizing various market signals, but the final decision will always be yours. I am sure that the principle of operation of any market indicator is best explained with practical examples, and they are given a lot of space in this book. You will find charts of various stocks, bonds, metals, currencies, stock indices, but most of the examples relate to the futures market, which I have most often dealt with. These will be charts of different time intervals (timeframes) - intraday, weekly, monthly, but most often daily. Remember that the principles of forming candlesticks and candlestick patterns are always the same - regardless of the timeframe. Two glossaries are published at the end of the book: the first contains the terms of candlestick analysis, as well as schematic examples of candlesticks and patterns, and the second describes the numerous other technical tools mentioned in various chapters. Sometimes in Japanese sources there are different definitions for the same terms. For example, one writer writes that a dark cloud cover pattern requires the market open to be higher than the previous day's close (see Chapter 4), while others argue that trading must start above the previous high. In technical analysis, given its subjectivity, definitions always depend on the experience and level of training of the one who gives them. In such situations, I have chosen for this book those options in which the signal issued by the candles is more likely to work. Thus, the “veil of dark clouds” portends a trend reversal and forms at the top. Obviously, the bearish trend will be more pronounced if the market begins to fall after opening at record levels, and not just above the closing price. Also, most of the Japanese texts I studied were lacking in clarity. This may be partly due to the inherent Japanese tendency to express themselves vaguely. This feature of the Japanese character is rooted in the era of feudalism, when a samurai could cut off the head of any commoner, suspecting that he treated him without due respect. It was sometimes difficult to predict what exactly a samurai wanted to hear from a commoner, so vague answers probably saved a lot of heads at that time. However, I tend to see the main reason for the fuzziness of the presentation in something else: technical analysis is more of an art than a science, it has guidelines, but there are no strict rules, which means there may not be clear definitions. However, due to this vagueness, some of the ideas presented in the book reflect not only the point of view of Japanese authors, but also my own views. For example, if a Japanese source claims that a candle should “beat” the previous one to signal an emerging bullish trend, then I replace the word “beat” with “close higher”, because I believe that the closing price is much more important than the price maximum reached intraday. Or, for example, in Japanese literature, many graphic patterns are recognized as especially significant if they occur in the “high price zone” or “low price zone” - it is obvious that such assessments are largely subjective.