How to Make Money Trading with Candlestick Charts

It proved to be a good reversal, but
it was not a candlestick signal.
The trader
would be well advised not to chase these
“almost” candlestick formations. There are
hundreds of pure candlestick signals being
formed every day. They have been tested
thoroughly for centuries. Take advantage of
them. Do not unnecessarily put your hard

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earned money in trying to reinvent the wheel.
We will conclude the Inverted Hammer
discussion with 
Figure 5.5
, showing the chart
of Tata Power Co. Ltd.
Figure 5.5:
An Inverted Hammer starts
the next leg up in Tata Power

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What can you observe before the downtrend
reversed? You can see there was a Hammer.
Would you buy the day after the Hammer?
No. If you said yes, you might want to re-
read the previous chapter. To be a true
reversal, the Hammer signal needs
confirmation. In this case there was none.
However, the Hammer was followed by an
Inverted Hammer. The day after that was a
Doji day, where price closed higher and
confirmed the presence of the bulls. I would
probably have bought after prices gapped up
following the Doji day.
Here, again, the market was giving strong
signals to the trader who was tuning in. It
gave him a Hammer, then followed that with
an Inverted Hammer, then followed that with

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a Doji, and then a gap up. All these signals
were suggesting that the bulls were coming
into the stock. Learn to analyze these
formations and the market will reward you.

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Shooting Star
Description
Figure 5.6
shows a visual depiction of the
Shooting Star signal.
Figure 5.6: