How to Make Money Trading with Candlestick Charts

Bullish and Bearish Harami
reversing trends in ABB Ltd.
Notice how after the price had risen from
around the 
`
2,800 area to the 
`
3,300 area,
the candles started getting bigger and the

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volume started expanding. Investors were
now buying exuberantly. If you had owned
this stock, where would you sell it? The
correct point would have been to sell as
soon as the Bearish Harami got confirmed.
Remember, the point of trading is not to buy
exactly at the bottom and sell exactly at the
top. Leave that to somebody else to try. It is
simply too difficult and not worth the risk.
As a candlestick trader, you will try to
capture the juicy middle part of the trend.

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9
Morning Star and Evening Star
Signals
The Morning Star and Evening Star are very
powerful three-day reversal signals and once
mastered they help traders reap huge profits.

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Morning Star Signal
Description
Figure 9.1
shows a Morning Star signal
formation. The Japanese named it so because
like the planet Mercury, which is known as
the morning star, it foretells of good things to
come (morning). In the case of stocks, it
means that the prices will start moving
higher from here on.

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Figure 9.1:
Morning Star signal

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Criteria
In order for the Morning Star signal to be
valid, the following conditions must exist:
The stock must have been in a definite
downtrend before this signal occurs. This
can be visually seen on the chart.
The first day of the signal must be a long
dark body. The second day must be a day
of indecision. The third day should be a
long white candle reaching at least half
way into the body of the first day’s dark
candle.
There are many variations of the Morning
Star signal. 
Figure 9.2
 shows a few of these

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variations.
Figure 9.2: