How to Make Money Trading with Candlestick Charts

Hindustan Lever falls after an

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Evening Star signal
Notice that a Bearish Harami is part of the
three day signal. As I mentioned before, this
adds more weight to the reversal. One more
point to mention for this chart is the presence
of a Hanging Man signal a couple of days
before the Evening Star signal. The Hanging
Man was not confirmed. The trader who
bought into the stock after the confirmed
Hammer signal should have got out after the
Evening Star signal.
The chart in 
Figure 9.11
shows a classic
Evening Star signal.

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Figure 9.11:
Combination of Shooting Star
and Evening Star signals take down S.
Kumars
The first sign of the bulls weakening was
seen with the Shooting Star signal. The
candlestick trader would not have acted on
this as it did not get confirmed. Seeing the

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Evening Star signal form in the immediate
vicinity of the Shooting Star gives the
candlestick trader greater confidence that the
up trend is reversing.
Going short after the Evening Star signal in
Figure 9.12
 would have given a candlestick
trader very good profits.
Figure 9.12:
Rapid fall after an Evening
Star signal in Syndicate Bank

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This chapter concludes the discussion of the
major candlestick reversal signals. We have
seen how the one-day, two-day and three-day
reversal signals work and their effectiveness
at producing strong profits.
What is expected of the readers at this point
is a complete change in their perception of
how the markets work. The stock markets, or
for that matter all other financial markets,
move because of change in investor
sentiment. You are now learning to capitalize
on this point. The sooner you learn to notice
the fear and exuberance of other people as
depicted in the charts, the faster you will
grow your portfolio.

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