NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report GM INTRODUCTION TO BASIC CANDLESTICK PATTERNS 10 th September 2015 Nicholas Tan & Lucas Lee Global Macro Department
Disclaimer Introduction to Basic Candlestick Patterns 10 th September 2015 NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report NUS Invest is in no way affiliated or representative of any other company, organisation, club or society, and the views presented are solely our own opinions. The author(s) is not a licensed investment advisor. Our services are educational tools designed to assist you in your personal judgment. It is not designed to replace your licensed financial consultant, and nothing in the content shall be construed to be an offer or solicitation for the purchase or sale of a security. All content on our website and related services is for informational purposes only, and opinions have been made on a general basis. No consideration has been given to any particular individual or specific investment objectives, financial situations or other circumstances. As such, the content should not be relied upon as authoritative without further being subject to the recipient’s own independent verification and exercise of judgment. The fact that the content has been made available constitutes neither a recommendation to enter into a particular transaction nor a representation that any product described within is suitable or appropriate for the reader. Readers should be aware that many of the products which may be described within involve significant risks and may not be suitable for all investors, and that any decision to enter into transactions involving such products should not be made unless all such risks are understood and an independent determination has been made that such transactions would be appropriate. Nicholas Tan & Lucas Lee Global Macro Department
Agenda NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Introduction to Candlestick Patterns Basic Candlestick Patterns Trading Strategies Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015
What are Candlestick Patterns? NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report They are: A form of Technical Analysis i.e. reading the movement of the market Allows investors and traders to make high-probability guesses about the direction of the market Offer insights into the psychology of the market Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015
A Brief History of Candlesticks NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Candlestick Patterns: Originally Developed by Japanese rice traders in the early 1600s White Candles when prices went up; Black Candles when prices went down Honma Munehisa ( ): Rice trader from Sakata, father of candlestick analysis Popularised by Steve Nison in the 1991 Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015
Understanding the Candlestick NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Anatomy of a Candlestick Body Shadows Open/Close High/Low Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015
Market for Stock X on Thursday, 10 th September NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015 Open High Low Close $2.00 $2.25 $1.00 $1.25
What can we learn from Candlestick Patterns? NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report From a candlestick pattern, we can know… The Open/Close/High/Low Prices The volume and strength of buying/selling pressure Whether there is more greed or fear How to make our trades! Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015
NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015 Let’s make a guess!
Bulls vs Bears NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015 Bulls want the price to go up Bears want the price to go down The Stock Market is a constant battle between the bulls and bears/ between buyers and sellers
Bulls vs Bears NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015
Who is in control? NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015
Agenda NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Introduction to Candlestick Basic Candlestick Patterns Trading Strategies Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015
NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015 Candlestick Patterns
NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Hammer (after a Downtrend) Small body Long lower shadows at least twice the length of the real body No/Short upper shadows Suggests Bullish Momentum/ Buying Pressure Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015 Single Candlestick Patterns
NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015 Single Candlestick Patterns Open Low High/Close
NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015 Where is the market headed? Go Long!
NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Shooting Star (after an Uptrend) Small real bodies Long upper shadows at least twice the length of the real body No/Short lower shadows Suggests Bearish Momentum/ Selling Pressure Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015 Single Candlestick Patterns
NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015 Single Candlestick Patterns Open High Low/Close
NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015 Where is the market headed?
NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Doji Open and Close Prices almost the same Market is two-sided Suggests indecision and trepidation between buyers and sellers Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015 Single Candlestick Patterns
NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015 Single Candlestick Patterns Open Close High Low
NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015 What’s happening in the market?
NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Marubozu (‘Shaven Top’) Long white/black body with no shadows A full white body suggests that bulls controlled the price from open to close A full black body suggests that bears controlled the price from open to close Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015 Single Candlestick Patterns
NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015 Single Candlestick Patterns Open Close Low High
NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015 Three White Soldiers: Where is the market going?
NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Bullish Engulfing Pattern Small Bearish Candle followed by a Long Bullish Candle Engulfs the entire range of the previous bearish candle Suggests higher than average volumes and strong Bullish Momentum Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015 Two Candlestick Patterns
NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Bearish Engulfing Pattern Small Bullish Candle followed by a Long Bearish Candle Engulfs the entire range of the previous bullish candle Suggests higher than average volumes and strong Bearish Momentum Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015 Two Candlestick Patterns
NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015 Questions to Ask when using Technical Analysis: Key Questions: What is happening in the market? Who is in control? Bulls/Buyers? Bears/Sellers? What is the market telling you to do?
Agenda NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Introduction to Candlestick Basic Candlestick Patterns Trading Strategies Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015
Agenda for Trading Strategies NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Examples of failed candlestick patterns How to use candlesticks properly to create trading strategies Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015
What is Shorting? NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Shorting is a trade that allows one to profit from falling prices Exact mechanism of this trade will not be examined Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015
Failed candlestick patterns(Hammer) NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015
Failed candlestick patterns(Shooting Star) NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015
Failed candlestick patterns(Bearish Engulfing) NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015
Failed candlestick patterns(Bullish Engulfing) NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015
Philosophy of Trading Candlesticks NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Candlesticks alone are of limited utility Create strategy to combat this problem Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015
Premise of a candlestick pattern NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Indicate a zone where reversal is likely This zone does not always lead to a high probability reversal in prices Solution: Principle of zonal confirmation Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015
What is Zonal Confirmation NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Whenever a candlestick pattern appear, it creates a possible ‘zone of reversal’ We should not always expect a reversal there We have to learn how to ‘confirm’ that this zone will indeed lead to a high probability reversal in prices Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015
What is zonal confirmation? NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015
Creating a possible zone of reversal NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015
Zonal Confirmation NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015
Zonal Confirmation NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015
Summary of zonal confirmation strategy NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015 Identify a candlestick pattern and create a possible ‘zone’ around it Once this zone is confirmed, we go ahead and bet on reversal in prices
Zonal strategy applied to Apple NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015
Zonal strategy applied to Apple NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015
Zonal strategy applied to Apple NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015
Theory of Ranges (Second Strategy) NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015 Market does not always move in one direction Most of the time, it will move around aimlessly without a clear direction within a certain range When this happens, we call this a ‘ranging’ market
Representation of range in candlestick NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015
How does knowing Theory of Ranges help? NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015 Market is either in Trend or range When ranging, it is prepared to transit into a trend Trade in that direction
What usually happens to such traders? NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015
What usually happens to such traders? NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015
What usually happens to such traders? NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015
How to establish proper range NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015 Establish a possible range with a Doji Candlestick Prices must ‘respect’ the boundaries ‘Range confirmation’
How to establish proper range NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015
How to establish proper range NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015
How to establish proper range NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015
How to establish proper range NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015
The End! NUS Invest nusinvest.com DISCLAIMER AND DISCLOSURES Please read the disclaimer and the disclosures which can be found within this report More men have become great through practice than by nature."- Democritus Nicholas Tan & Lucas Lee Global Macro Department Introduction to Basic Candlestick Patterns 10 th September 2015