Japanese Candlesticks Chpt 3 constricting candlestick lines Flashcards
The rectangular sections of the candle lines in Exhibits 3.4 to 3.6 are called …. It represents the range between …..
the real body. the session’s open and close.
When the real body is _______________it means the close of the session was lower than the open. If the real body is it shows the close was higher than the open.
Black or Red white (i.e., empty) or green
The thin lines above and below the real body are _________ They represent the session’s __________
the shadows or wicks (these names are almost lyrical—the real body and the shadows of these real bodies.) price extremes.
The shadow or wick above the real body is called ___________ and the shadow below the real body is _____________
Upper shadow/ wick Lower shadow/ wick
If a candle line has no upper shadow, it is said to have A candle line with no lower shadow has a
Shaven head Shaven bottom
The Japanese say the real body is _________________ This reflects a central concept about the power of the real bodies: By looking at the height and color of the real body, we get an immediate visual clue whether it’s __________________
“the essence of the price movement.” the bulls or bears who are in control.
A long white/green candle in Exhibit 3.4 as an example, Shows who is in charge? The bulls or bears?
Bulls
a long black/Red candle is a visual representation that, at least for that session the ________________were in control since the market opened near its ___________ high and closed near the session _______ lows.
Bears
High
Lows
Candle lines can be drawn using _________time frame—from _______ to __________ to _________ charts.
any time frame—
from intraday to daily to weekly charts.
A white/green candle if based on a daily chart, would mean that the bottom of the real body is the _____________ and the top of the real body is _________________respectively.
the first trade of the day (remember, a white/green real body signifies the open is at the bottom of the real body)
the day’s close.
a five-minute black/Red candle line tells us that the open of that five-minute period is at_________ of the black/Red real body and the close is at___________. The high and low of that five-minute session will define the __________ and ____________
The top
its bottom.
Upper and lower shadows/wicks.
A practical application of the real body is using its size as a barometer of the market’s _________
Momentum
While a long white/green and black/Red candle shows the action is one-sided, we get a clue that the prior momentum may be losing force as the real body becomes ___________.
Smaller
The Japanese term for a small real body is
a spinning top.
The lines have upper and lower shadows, but the sizes of the shadows are not important. It is the small size of the real body that makes these spinning tops.
A candlestick with a very small or nonexistent body is called a ____________ and it represents when the open and close are the same (or very close to one another).
A doji
formed (the plural of doji is also doji) Doji have implications as a reversal signal.
The more anxious the trader, the earlier he or she wants to trade. Therefore, on the open,
- shorts may be scrambling for cover (buying),
- potential longs may want to emphatically buy,
- hedgers may need to take a new or get out of an old position.
After the flurry of activity on the open, potential buyers and sellers now have a _____________. There are frequent analogies to trading the market and fighting a battle. In this sense, the open provides __________________________________________.
A benchmark
an early view of the battlefield and a provisional indication of friendly and opposing troops.
We can thus expect heavy emotional involvement into how the market ____________. It is also a critical price point for many technicians. They may wait for it to confirm a breakout from a significant chart point. Margin calls in the futures markets are also based on it. Many computer trading systems (for example, moving average systems) are calculated from it as well.
Closes
Close
big orders on the open or close. If a large buy or sell order is pushed into the market at or near the open, with the intention of affecting the open, the Japanese call this action a “_____________.” If this is done on the close, it is called, not surprisingly, a “_____________.”
Morning attack
Night attack
Technical analysis is the only way to measure the__________ component of the market.
emotional
an ounce of emotion can be worth a pound of facts. How else to explain a sudden shift in the market without any change in the ________________?
Fundamentals
A fascinating attribute to candle charts is that the names of the candle patterns are a colorful mechanism describing the __________ ___________ of the market at the time these patterns are formed and thus made easier to remember if the patterns are bullish or bearish.
Emotional health
