A practical, hands-on guide to building your mastery of candlestick charting and analysis Candlestick charting has become one of today’s most popular technical analysis tools for both individual and professional investors. And it’s much easier than you probably think. In fact, creating a candlestick chart demands no more information than traditional charting requires. With candle pattern analysis, the payoff is a deeper look into the minds of investors and a clearer view of supply and demand dynamics. In this companion volume to his bestselling Candlestick Charting Explained , Gregory L. Morris delivers hands-on knowledge you need to make candlestick charting and analysis a key element of your portfolio-building strategy. With this book you will be able to: Identify candle patterns and quickly see what traders and investors are thinking - Use reversal patterns to enter or reverse your positions - Identify continuation patterns to establish additional positions - Utilize charting software to recognize patterns automatically Packed with study questions, data tables, diagnostic tools, terminology, sample charts, and market analyses, Candlestick Charting Explained Workbook helps you speed up the learning process and ramp up the profits. Gregory L. Morris is Senior Vice President, Chief Technical Analyst, and Chairman of the Investment Committee for Stadion Money Management, LLC. Widely recognized as an expert on candlesticks, he is often interviewed on national media and frequently speaks at financial conferences. Morris is the author of the bestselling Candlestick Charting Explained. Gregory L. Morris is Senior Vice President, Chief Technical Analyst, and Chairman of the Investment Committee for Stadion Money Management, LLC. Widely recognized as an expert on candlesticks, he is often interviewed on national media and frequently speaks at financial conferences. Morris is the author of the bestselling Candlestick Charting Explained. CANDLESTICK CHARTING EXPLAINED WORKBOOK Step-by-Step Exercises and Tests to Help You Master Candlestick Charting By GREGORY L. MORRIS The McGraw-Hill Companies, Inc. Copyright © 2012 The McGraw-Hill Companies, Inc. All rights reserved. ISBN: 978-0-07-174221-4 Contents PrefaceAcknowledgments1 Enlistment: Getting Ready for Duty2 The Foundation: Preparing for Battle3 Reversal Patterns: Repelling the Advance4 Continuation Patterns: The Next Attack Wave5 Intelligence Briefing: Pattern Identification and Filtering6 Honorable Discharge: Putting It All TogetherAppendix A: Other Japanese Charting MethodsAppendix B: Academic Papers on CandlesticksSourcesAnswer KeyIndex Excerpt CHAPTER 1 ENLISTMENT: GETTING READY FOR DUTY By purchasing this workbook, you have voluntarily enlisted to participate indoing battle with the markets. The markets are living, morphing entities thatfeed off of human emotion and trader losses. It is my intention to provide youwith the weapons necessary to trade what you see, to help you harness the powerof candlestick analysis, and to avoid unnecessary losses. We will start with thebasics of candlestick lines and patterns and then add weapons to our arsenal aswe progress. First, however, let me step you through my journey that has broughtus together at this point in time. WHY BOOT CAMP? In 1971, after graduating from the University of Texas with a bachelor ofscience degree in aerospace engineering, I was faced with a country inrecession, and the marketplace for new engineers was scarce, so I joined theUnited States Navy to become a fighter pilot. Of course, that meant that I hadto become an officer, and that, in turn, meant that I had to attend Officer'sCandidate School in Pensacola, Florida. No problem, right? In October, 1971, I drove from Dallas, Texas, in my 1962 nonair-conditioned,faded-blue, four-door, standard transmission, six-cylinder Chevrolet Bel Air.This fine automobile had been with me since I was a junior in high school andhad close to 175,000 miles. In the trunk, I had a box of my aerospaceengineering books because I knew the Navy would be impressed and probably wantme to teach others about aerodynamics, heat transfer, and boundary-layer theory.I started to include my golf clubs but later decided that I wouldn't have thatmuch spare time between learning to be an officer, teaching aerodynamics, andengaging in all the social aspects of being a Navy pilot. Additionally, I hadbeen a private pilot since 1967 and assumed that I knew all there was to knowabout flying airplanes. Wow, was I in for a shock! After checking into a World War II barracks (I knew this was justtemporary), I was told that I did not need anything from my car and would needonly the clothes on my back. I was excited as I thought that I'd be issued myjet flight equipment and some officer uniforms. Then I was told to get a goodnight's rest and expect to get up fairly early. When I dropped off to sleep thatnight (the barracks was not air-conditioned)