How to Make Money Trading with Candlestick Charts Book by Balkrishna M. Sadekar

The Japanese art of candlestick trading has been a lucrative strategy for centuries. Traders in Japan used these unique signal formations to accumulate massive wealth. Over time, these signals have been refined, tested, and applied in various markets worldwide. Candlestick signals can be used to profit in any open market, regardless of the traded instrument.

The Power of Candlestick Charts

Candlestick signals provide valuable insights into investor psychology and market sentiments. These visual representations help traders understand the behavior of other market participants. Whether you’re trading commodities, stocks, or futures, candlestick signals are effective tools. They can be applied to analyze and trade in markets like the Nasdaq, Nikkei, German DAX, or Nifty.

A Book Written for Indian Traders

While many books have been written on candlestick charting, most focus on the US markets. “How to Make Money Trading with Candlestick Charts” by Balkrishna M. Sadekar is specifically tailored for Indian traders. The included charts showcase companies trading on the National Stock Exchange and the Bombay Stock Exchange.

Mastering Emotions and Understanding the Market

Experienced traders know that trying to master emotions like fear and greed is a futile endeavor. Instead, they design trading systems and follow predefined rules to execute their trades. They understand that the market is much bigger than them and their egos. To win in the market, successful traders have mastered the art of interpreting subtle market hints. This is where candlestick signals come into play.

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The Visual Power of Candlestick Charts

Candlestick charts offer a more intuitive and visually appealing way to analyze market data. The contrasting black (red) and white (green) color bodies make it easier to understand price movements. Once you start using candlestick charts, other charting techniques may seem dull and outdated. With practice, you’ll be able to analyze any candlestick chart within a minute.

Key Candlestick Signals

There are numerous candlestick signals defined by Japanese traders, but we will focus on the most common ones. These major signals occur frequently and provide valuable insights. By understanding these signals, you can enhance your trading confidence and increase your portfolio returns.

  • Hammer: Signaling a potential bottom reversal, this signal occurs when a stock that has been selling off heavily during the day is driven back up near its opening price. Confirmation of the reversal is needed for entry into the market.
  • Bullish Engulfing: This reversal pattern forms when a large white candle completely engulfs the previous day’s smaller black candle. It indicates a shift in control from bears to bulls.
  • Morning Star: This three-candle pattern suggests a bullish reversal. It consists of a long dark candle, followed by a small indecisive candle, and finally a large white candle. The presence of a gap between the candles adds credibility to the reversal.
  • Abandoned Baby: This signal occurs when there is a gap between the first and second day, as well as a gap between the second and third day. It indicates a significant change in investor psychology and can be a strong signal to sell or go short.

The Importance of Confirmation

When using candlestick signals, it’s crucial to look for confirmation from other technical indicators. The probability of a successful reversal is greatly enhanced when multiple signals align. As a trader, always rely on signals and indicators rather than simply buying or selling based on intuition or emotions.

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Remember, trading is not about catching falling knives or hoping for miracles. It’s about understanding the signals, analyzing the indicators, and making informed decisions.

To access “How to Make Money Trading with Candlestick Charts” by Balkrishna M. Sadekar, click here. This book will provide you with valuable insights into candlestick charting and how to effectively use it in your trading strategy.

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