As reference material this web site uses some of the basic concepts of candlestick charting found in books like Beyond Candlesticks: New Japanese Charting Techniques Revealed by Steve Nison and Candlestick Charting Explained: Timeless Techniques for Trading Stocks and Futures by Gregory L. Morris.
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HotCandlestick Service ($18.00 / 30 days, $45.90 / 90 days, or $151.20 / year): End of day daily, weekly and intraday candlestick analysis of stocks traded on the AMEX, NYSE, NASDAQ, Toronto (TSE) and the Canadian Venture (Cdnx) exchanges. Canadian and USA indices included. FOREX (currency market) included. Searchable/sortable historical data going back to 1992 - updated daily. Swing traders will love this one. View the benefits then signup for the HotCandlestick service. If for any reason you are unsatisfied with the service within the first 30 days then use the support form to request a refund of your first subscription payment and we will issue the refund then cancel your subscription, no questions asked. Limit 1 refund per subscriber. Refund is available only for your first payment.
Japanese candlesticks offer a glimmer into the psychology of short-term trading activity. Candlesticks can show whether the buyer or seller has control of the market. The high and low are described as shadows and plotted as a single line.
The price range between the open and close is plotted as a rectangle on the single line. If the close is above the open, the body of the rectangle is white. If the close of the day is below the open, the body of the rectangle is red.
The Japanese developed a method of technical analysis to analyze the price of rice contracts. Today, this technique is called Candlestick charting. Munehisa Homma (a.k.a. Sakata), a wealthy Japanese businessman began trading at the local rice exchange around 1750. Sakata kept records of the market psychology and learned not to rush into trades. Click here to read more about candlesticks.
Click here to view the candlestick patterns we track. HotCandlestick.com considers the recent trend of the stock price, number of candlesticks in the formation and daily volume. First, if you are looking for a number to tell you how successful a particular candlestick pattern has been, then you must subscribe to HotCandlestick. The measure of past success of the candlestick patterns tracked at HotCandlestick.com is called the SCORE, not the STRENGTH. You should think of the strength as a measure of correlation between the definition of the candlestick pattern and the actual pattern formed.
The strength value can be any value. However, it will tend to gravitate toward zero. A positive value means there is a positive correlation between the candlestick formation's definition of a proper setup for the formation and what is actually happening on the stock chart in recent days. For a candlestick pattern with a negative strength, this signifies that the price action prior to the candlestick pattern does not correlate with the defined expected forward price action of the stock. The larger negative strength value correlates less with the setup of the candlestick pattern.
Click on any of the patterns at http://www.hotcandlestick.com/candles.htm to view the defined expected forward price action for a particular candlestick pattern. HotCandlestick.com looks for the defined expected forward price action to manifest itself in the stock price over a period of 1-10 days after the daily candlestick pattern appears.
The interpretation of strength values depends on what type of pattern we are referencing. And, not all patterns hold all of the time due to the many factors that play into the price action of a stock. Supply / Demand, fundamental news, world events, etc. So we caution you to not rely solely on candlestick patterns to make your trading decisions. We incorporate 14 day fast stochastics and HotCandlestick Intraday Momentum Index (IMI) into our database to serve as additional technical indicators to help you in making your trading decisions. Subscribers can query and sort by these indicators.
For example, a Bullish Reversal or Bullish Continuation candlestick pattern with a -30 strength theoretically has less of a chance to rally in the coming days than that of the same pattern with a -7 strength.
A Bearish Reversal or Bearish Continuation candlestick pattern with a -30 strength theoretically has less of a chance to fall in the coming days than that of the same pattern with a -7 strength.
HotCandlestick.com, LLC has created a continually updating database of patterns and their success rates over defined time intervals. You should expect the success rates to change over time (different market cycles, major world events, etc.)
HotCandlestick.com, LLC calculates what we consider a valid formation based on criteria such as daily volume and our definitions of short and long individual candlesticks. Long and short candle body sizes are determined using a relative comparison of the previous 25 daily candle bodies on a stock by stock basis. This method of determining candle body size means that a non-volatile stock such as an ETF based on an index may have a long candle definition of 1.4% where a volatile stock may have a long candle definition of 8.7%.
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