s close relative to the previous day's close.
Wilder favored the use of the 14-period measurement because it represents one-half of a natural cycle in the market. He also set the significantlevels of the indicator at 30 and 70. The lower level indicates an imminentupturn and the upper level, a downturn.A plot of RSI can be interpreted using many of the classic bar chartformations, such as head and shoulders. Divergence with price within the
Figure 8-3
indicatorsThe indicators used to filter candle patterns should be easily available andsimple to define. They must perform in a manner that enables one todetermine areas of buying and areas of selling. These are often referred toas overbought and oversold areas. Indicators such as Welles Wilder's RSI(Relative Strength Index) and George Lane's %K and %D (stochastics) areexceptionally good for candlestick filtering because they both remain between 0 and 100. At the end of this chapter, many other indicators will beshown to demonstrate the filtering concept. Because RSI and stochasticsare so widely known and used, more detail will be provided on theirconstruction and use in filtering.
Chapter 8
Candlestick Filtering
period used to calculate the RSI works well, if the divergence takes placenear the upper or lower regions of the indicator.Many stock-charting services show RSI calculations based on 14 periods. Some commodity chart services prefer to use 9 periods. If you candetermine the dominant cycle of the data, that value would be a goodperiod to use for RSI. The levels (thresholds) for determining market turning points can also be moved. Using levels of 35 and 65 seem to workbetter for stocks, whereas the original levels of 30 and 70 are better for
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futures.In the chart of Philip Morris (MO), presented in Figure 8-3, the divergence of the 14-day RSI with the general price trends is quite obvious.Whenever the RSI gets into or near the thresholds, a change in the trend ofprices is soon to follow.
Lane's Stochastic Oscillator: %DGeorge Lane developed stochastics many years ago. A stochastic, in thissense, is an oscillator that measures the relative position of the closingprice within the daily range. In simple terms, where is the close relative tothe range of prices over the last x periods? Just like RSI, 14 periods seemsto be a popular choice.Stochastics is based on the commonly accepted observation that closing prices tend to cluster near the day's high prices as an upwards movegains strength and near the day's lows during a decline. For instance, whena market is about to turn from up to down, highs are often higher, but theclosing price settles near the low. This makes the stochastic oscillatordifferent from most oscillators, which are normalized representations ofthe relative strength, the difference between the close and a selected trend.The calculation of %D is simply the three period simple moving average of %K. It is customarily displayed directly over %K, making both ofthem almost impossible to see. Interpreting stochastics requires familiaritywith the way it reacts in particular markets. The usual initial trading signaloccurs when %D crosses the extreme bands (75 to 85 on the upside and 15to 25 on the downside). The actual trading signal is not made until %K
crosses %D. Even though the extreme zones help assure an adverse reaction of minimum size, the crossing of the two lines acts in a way similar todual moving averages.In Figure 8-4, the same chart of Philip Morris (MO) used in the RSIexample, we can see how good Lane's %D is at oscillating with the pricesto areas of overbought and oversold.
Filtering ParametersMany powerful trading and back-testing software packages are availabletoday. Some optimize indicators by curve-fitting the data, while othersutilize money-management techniques. A few have advanced methods thatconcentrate on all possibilities. It is not going to be the purpose here to
Chaptersamplify the faults or hail the innovations of this type of analysis. Themethod used will be simple and straightforward in concept.Three trading systems will be utilized in these tests: candle patterns,indicators, and filtered candlesticks. Each will use the same methodologyof buying, selling, selling short, and then covering so that a system is inthe market at all times. While this is not always a good way to trade, it isused here to show how filtered candlesticks will usually outperform theother two systems. Also, the trading results are shown as if there were aclosing trade on the last day of the data to give you a feel for the completetrading history.
Additionally, a signal is generated whenever the appropriate referenceindicator reaches the prescribed parameters. That is, the indicator musthave gone above (or below) the threshold and then cross it again in theopposite direction. For example, when %D goes above 80, it has enteredthe pre-signal area and the sell filter is turned on for the candle patterns.Any candle pattern that gives a sell signal when %D is above 80 will beregistered as a filtered signal. Similarly, whenever %D goes below 20, ithas entered the pre-signal area and the buy filter is turned on. Any bullishcandle patterns that appear will be considered filtered patterns. The thresholdsof 20 and 80 were used here only for purposes of explanation.Each of the indicators requires a setting for the number of days (periods) to be used in their calculation. As mentioned earlier, this value shouldreflect the basic cycle of the market being analyzed. Two additional valuesneed to be set: the upper and lower thresholds just mentioned. These arethe settings that determine the values that the indicator must reach orexceed before it will filter a candle pattern.Initially, commonly accepted values will be used: a 14-day %D, firstwith thresholds of 20 and 80 and then with thresholds of 65 and 35 ondifferent data. The data used will be the stocks of the S&P 100 Index andthe 30 stocks of the Dow Industrial Average. The S&P 100 databasestarted at the beginning of 1989 and ended on March 31, 1992. The DowIndustrials database began on April 24, 1990, and ended on March 31,1992.
Candlestick Filtering
Filtering ExamplesFrom Table 8-1 you can see that trading each stock using candle patternsfor the advice resulted in 67 stocks with positive percentage gains and 33losers. These numbers came simply from counting the positive and negative results in the first column. Trading strictly on the candle pattern signals resulted in an average of 37.1 trades, with an average gain per trade of0.40%.Trading the same 100 stocks using only %D for the trading signalsresulted in only 53 stocks that were winners and 47 losers. The number ofaverage trades was reduced to 30.1, with an average gain of 0.02% pertrade.Using the filtering concept for'the trading signals resulted in 62 winners and 38 losers. This was not as good as using the candle patterns bythemselves, but was much better than using signals generated strictly fromthe stochastic indicator %D. The average number of trades was 13.7,which is better than candle patterns or %D by over 50%. The average gainper trade was 0.60% which, again, is significantly better than the averagegain from the other two trading methods.
What does all of this really tell you? First, by filtering the candlepatterns with an indicator, such as %D, the number of trades is significantly reduced. Compared to candle patterns alone, the reduction was over63%, and compared to trades using the indicator %D alone, the reductionwas over 54%. Second, filtering increased the average gain per trade. Theincrease over candle patterns alone was 50% and the increase over the %Dwas over 30 times as great.You should not ignore or forget what is known about using statistics tomake a point; they can be manipulated to show whatever results the authoris trying to make. We all know that an average gain of 0.6% would quicklydisappear when we included commissions, slippage, and the like. Thesimplicity of these calculations, though, shows one very important point:It is the relationship of the numbers with each other that is important, notthe actual numbers. This relationship, taken as an average of the valuesderived from 100 different stocks, is the proof needed to support the filtering concept.
Chapters
In Figures 8-6 through 8-18, thirteen different indicators are displayedabove the candlestick chart of AA. The chart displays only the latest 140trading days, but the trading analysis still covers the data beginning January 1, 1989, and ending March 31, 1992 (3-1/4 years). The up and downarrows at the top of the chart (above the indicator) show the signals givenby the indicator itself. The up and down arrows below the indicator are theautomatic candle pattern identification arrows showing each candle patternand whether it is bullish (up arrow) or bearish (down arrow). If the candlepattern arrow is shown with a double head, it represents a filtered candlepattern. The box in the lower right corner of the chart displays the tradinginformation for the three trading methods. The information in the boxshows the effective dates, the total percentage gain or loss, the number oftrading signals, and the average percentage gain or loss per trade. You willnote that the trading results of the candle patterns by themselves will be thesame for all examples. The data did not change, therefore the candle patterns are the same. Only the indicator and, therefore, the filtered candlepatterns will change with each example. For all indicator examples, thetotal gain using candle patterns alone for trading Alcoa (AA) was 45.8%over the period from January 3, 1989, to March 31, 1992. There were 40trades, which made the average gain per trade equal to 1.14%.The price of Alcoa on the first day, January 3, 1989, was 55.875 andon the last day, March 31, 1992, was 70.5. So that you will have a basisfor judgment, a buy and hold strategy would have yielded slightly morethan 26%. Again, neither calculations for commissions nor execution slippage have been figured, nor have the figures been annualized. Because thetrading strategy has been kept so simple, one must consider only the relative values when viewing these concepts.One more thing might not be obvious: all trading is figured up to thevalue of the closing price on the last day of the data. This does not necessarily mean that a trading signal occurred on that day, only that the percentage gain or loss was calculated as if a valid signal had been given.
Candlestick Filtering
Chart 8-7 shows the faster %K indicator fnr 14 Avalues of 20 and 80. TT,e difference beteen %K andtn
reacts s.ighUy s,Ower than %K. Remember %D ,s 1° a Th"mov,ng average of %K. In this example, the filtered caldfc-Tee ,1D1eS better than »K when ,00^ t the .
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Candlestick Filtering
Figure 8-8
Since %K reacts quicker than %D, one could lower the upper thresholdand raise the lower threshold to give a larger filtering area. This wouldnormally generate more trades. For example, by changing the thresholds to25 and 75, the filtered candles gained 71.6%, with 21 trades for an averagegain per trade of 3.41%. Using a larger filtering area was not quite as goodas the original example, however, because although it did, in fact, increasethe number of trades it did not increase the overall gain. The results of theindicator %K were only slightly improved to 51.9%. Opening up thethresholds to 30 and 70 increased the filtered candle trades to 27 with again of only 31.5%. The indicator actually decreased in performance to45.6%. This shows that the tighter thresholds of 20 and 80 tend to produce
better results for filtering without changing the indicator results appreciably.Figure 8-8 shows Wilder's RSI for 14 days, with threshold values of35 and 65. The average gain for the filtered candles was over twice asgood as the average gain from RSI. When you consider that there werealso fewer trades, the average gain per trade for the filtered candles wasexceptionally better than RSI.Figure 8-9 shows the money flow index. Money flow is calculatedsimilarly to RSI, but the days when the price closes higher are averagedseparately from the days when the price closes lower. In this case a periodof 21 days was used for the smoothing of both the up closes and the down
Chapters
candlestick Filtering
closes. Prior to smoothing, the change in price each day is multiplied bythe volume for that day. This way an up day with large volume wouldcause a larger move in the indicator than would a similar up day with littlevolume. Once the two averages are calculated, they are further operatedupon to produce an indicator that moves between 0 and 100.As you can see from the trading box in Figure 8-9, the filtering conceptonce again performs much better than the indicator itself, even though theindicator did quite well.
Figure 8-10 shows an indicator knows as the rate of change. Rate ofchange is a fairly simple concept that is widely used by many analysts.Here a ten-day rate of change is used by taking the percentage differencebetween the closing price today and the closing price ten days ago. Forexample, if the value of the rate of change indicator were 7.5, one coulddeduce that the price on that day was 7.5% greater than the price ten daysago.The trading signals for this indicator cannot be given by thresholdsbecause the up and down values are theoretically unlimited. Therefore, thetrading signals are generated by the crossing of the indicator with its ownten period smoothing. Ten periods for the smoothing value is used formost indicators that work this way. Better values may exist for certainstocks or commodities, but ten seems to be consistently good.
ChaptersThe rate of change indicator did better than the candle patterns andmuch better than the filtered patterns when looking at total gain. Becausethe filtered candles almost always result in fewer trades, the average gainwas better with the indicator, but not significantly so. The filtering areaoccurs after the indicator crosses the zero line and before the indicatorcrosses its own smoothing.Figure 8-11 shows Arms' Ease of Movement Indicator for 13 periods.The signal is generated when it crosses its own ten period smoothing. Easeof Movement is a numerical method used to quantify the shape of a boxused in Equivolume charting. Arms takes a ratio of the box width to thebox height, called the box ratio, which is a ratio of the volume to the pricerange. Heavy volume days with the same price range result in a higher boxratio and, therefore, difficult movement.Figure 8-11
Candlestick Filtering
Based upon total gain, this indicator did not do better than candlesalone or filtered candles. Likewise, when the number of trades is considered, filtered candles did much better.Figure 8-12 shows the double momentum oscillator for 18 periods.Like most oscillators, a signal is generated when it crosses its own 10-daysmoothing. The double momentum oscillator is a combination of two rateof change calculations which are 20% above and below the value set forthe indicator. In this example, the indicator value is set at 18, so the tworate of change calculations are 14 and 22.In this example, the filtered candles greatly outperformed the indicator.
Chapter 8
Candlestick Filtering
Figure 8-14
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Figure 8-13 shows the linear trend indicator for 15 periods. The lineartrend indicator is based upon the slope of a least squares fit over thechosen period, in this case 15 days. Because the LTI is such a smooth line,a shorter 5-day crossover smoothing was used.From the trading box in Figure 8-13, the indicator generated goodresults, but the filtering concept failed to do better than the indicator or thecandles. Filtered candlesticks obviously does not work every time.
Figure 8-14 shows Wilder's Directional Index for 14 periods. Again,signals are generated when it crosses its own 10-day smoothing. Wilderdeveloped the directional index along with the RSI in 1978 (see bibliography). Using signals from a simple crossover smoothing is not the methodWilder suggested for its use. However, that was the only method thatwould generate a filtering area.
The filtering concept did quite well here also. Notice that even thoughthe indicator did not do very well, the filtered candles did almost threetimes better.
Chapter 8Candlestick Filtering
Figure 8-15
Figure 8-15 shows the price detrend oscillator for 21 periods. Thisindicator is the difference between the closing price and a smoothing of theclosing price, in this case 21 days. Signals are generated when PDOcrosses its own 10-period smoothing.Here is an example where the indicator was exceptional and the filteredcandles were a failure. The suspected problem is in defining the filteringarea used on the indicator.Figure 8-16 shows Appel's Moving Average Convergence DivergenceIndicator, known as MACD. MACD is an extension of the price detrend
Figure 8-16
oscillator, in that another smoothed value is used instead of the closingprice. MACD uses the difference between a 12-day smoothing and a 25day smoothing. Signals are generated when this difference crosses its own9-day smoothing. Nine days were used here because that is the popularsetting used by most analysts. Incidentally, in keeping with the previoususe of 10 days for the smoothing value, it actually improved the indicatortrading results by over 7%.MACD did not perform well in this example. However, filtered candles yielded an average of 4.29% per trade.
Chapter 8
Figure 8-17 shows Lambert's Commodity Channel Index for 14 periods. Signals are given whenever CCI crosses the thresholds of 100 and-100. The Commodity Channel Index was designed for use with commodities that exhibit cyclical and/or seasonal characteristics. It consists of themean deviation over the number of periods selected, in this case, 14.Filtered candles, again, did exceptionally well when compared to theindicator or candle patterns.
Candlestick Filtering
Figure 8-18 shows Bollinger's Oscillator, %B, for 20 periods. %B isanother method of displaying the Bollinger Bands developed by JohnBollinger. Bollinger Bands used two standard deviations over a period of20 days to encase about 95% of the price action. It is an excellent way toshow the volatility of the market. %B looks merely at the closing pricerelative to the upper and lower Bollinger Bands, much in the same way asstochastics are calculated. %B is a measure of where the closing price isrelative to the Bollinger Bands. Signals are generated whenever %B exceeds 100% and 0%From the trading box in Figure 8-18, you can see that %B by itselfgives excellent trading results, but when used as a filter for candle patterns,the results for average gain are even better.
Chapter 8
ConclusionIt should be obvious that filtering candle patterns with popular indicatorsis an almost certain method of improving your trading results. Not onlydoes it provide better overall gains from a simple trading system, it willalmost always reduce the number of trades. Reducing the amount of trading will also reduce transaction costs and produce a much higher averagegain per trade. Filtering works!
Candlestick charting has produced a number of derivative charting andanalysis methods. The appeal of candlestick charts, as a method of plottingmarket data, is that they visually help to interpret the market. Your braincan quickly assimilate the information because it is displayed so consistently well. A new charting method, called CandlePower charting, adds anew dimension to candlestick charts: volume. CandlePower is a trademarkof N-Squared Computing, the originator of the concept.
CandlePower ChartingCandlePower Charting is another visually appealing charting techniquethat combines the power of Japanese candlesticks and volume.Typical charting (whether bar or candlestick) shows the price action onthe vertical scale and time on the horizontal scale (see Chapter 1). Volumeis usually depicted as a histogram plot under the prices. Two significantpieces of information are generated each time a transaction occurs betweena buyer and a seller. One of these, price change, we tend to react toemotionally, and the other, volume, we largely ignore. Volume is certainlya more valuable tool to market analysis than is usually acknowledged.Richard Arms claims that price tells us what is happening and volume tells
Chapters
us how it is happening. Joseph Granville filled an entire career analyzingand writing about volume.f/l^t-tt .'«p.;'>'«>*<. /Volume, during most phases of the market, will precede prices. This isa hotly contested remark, but watching both price and volume can onlyenhance your timing and decision making. Simply said, when price andvolume are increasing, it is considered bullish. Likewise, when prices andvolume are decreasing, it is considered bearish.
ExamplesFigure 9-2
Figure 9-1
As shown in Figure 9-1, the body of a CandlePower day, just like acandlestick, is made up of the difference between the open and close. Thecolor of the body and the shadows also follow the same conventions usedin Japanese candlestick charting. The difference is that the width of thebody is a reflection of the volume for that day. A day with large volumewill be a wider candlestick body than a day with less volume. On a chart,it is easy to pick out the largest volume day by finding the widest body.Likewise, the day with the smallest volume will be the thinnest body.Many candle patterns can have added importance when volume isintroduced. For instance, a bullish Engulfing Day will be even more bullish ifthe second day also is accompanied by larger volume. A Morning Starpattern can be judged more successful if there is excessive volume on thelast day.
In Figure 9-2, the CandlePower chart of Avon Products (AVP), notice howthe upmove contains large white candle lines. These wide lines show thatthe upmove is fully supported by volume. Once the large white days dryup, the move has probably run its course.The large black day in the chart of Bell South (BEL) shows a classicvolume blow-off day (Figure 9-3). After a good upmove, the volume startsto dry up. Then, in one day, prices explode to the upside, but close neartheir lows on very large volume. A few days into the decline, a three-dayrally is terminated with a gap down. Then the decline continues.
Chapter 9Figure 9-3
In Figure 9-4, the chart of Citicorp (CCI), notice how each turningpoint in the market is accompanied by large volume. The market bottomedwith a large black day, then rallied. The rally stopped with a large whiteday, then went sideways until the next large white day. From there itgapped up twice, followed by two days of indecision (Spinning Tops),each with large volume. Here again, Spinning Tops with large volumesupport the indecision of the marketplace. Large amounts of stock changedhands, but no side took the leadership.
Derivative Charting MethodsFigure 9-4
The bottom reversal toward the end of December on the chart of Litton(LIT) shows continually larger-volume days (Figure 9-5). In fact, if it werenot for the small white Spinning Top day, a Morning Star bullish reversalpattern would have represented the bottom. Here is another example wherevolume increasing throughout a pattern will add to its significance.Figure 9-6, the last example of CandlePower charting, shows moredata (volume maximum has been reduced), so the richness of the charting
method can be fully appreciated.
Chapter 9Figure 9-5
Derivative Charting Methods
Figure 9-6
Chapter 9Areas of volume congestion can be easily spotted using condensedCandlePower Charting. Trendlines used on this type of chart would alsoreflect the volume component.
ExampleFigure 9-7
Successful analysis of the stock and futures markets is not an easy task.Most participants prepare themselves no better than they would for a gameof cards. One must first learn how these markets work, then learn about themany different kinds of analysis that are available, such as, fundamentaland technical analysis. On a smaller scale, the field of technical analysisoffers a host of varying techniques; Japanese candlestick analysis is one ofthese.Throughout this book, it was emphasized that candlestick analysisshould be used with other analysis methods. At the risk of sounding contradictory, I would like to warn that too many methods can only confuseand hinder. It reminds me of the saying that the person with a watchalways knows what time it is, but the person with two watches is neversure.
The data used for the Condensed CandlePower chart in Figure 9-7 is thesame as in the last example of CandlePower Charting. This was doneintentionally, so you could easily see the difference in charting methods.
It has been shown that candle pattern analysis can enhance the use andtiming of popular technical indicators. Filtered candlesticks consistentlyoutperform a host of technical indicators and usually candle patterns bythemselves. The combination of technical indicators and techniques is notnew; in fact, it is the method of analysis most successful traders use.Adding candle patterns to that arsenal will surely further improve tradingresults.
Chapterio
I'm sure that with the passing of time, new and different analysistechniques will surface. Some will gain in popularity, some will go by thewayside. Any analysis technique that has a substantial basis for its methodwill usually survive. I am convinced that candlestick charting and candlepattern analysis will be a survivor.
CandlePower SoftwareAll of the charts, the candle pattern ranking, and filter testing was accomplished with a software program called CandlePower by N-Squared Systems. CandlePower software will automatically identify all 62 of thepatterns mentioned in this book. Complete filtering capability on the following listed indicators is quickly and easily accomplished:
• Arms' Ease of Movement• price Detrend Oscillator• Wilder's RSl
• Lambert's Commodity Channel index• Bolllnger's Oscillator
• Wilder's Directional indicator
• Lane's Stochastics
• Double Momentum Oscillator• Price Rate of Change• Appel's MACD
• Linear Trend indicator• Money Flow index• Plus, Expert Signal Predictor
N-Squared Systems6821 Lemongrass Loop SESalem, OR 97306
An interview with Japanese trader,Mr. Takehiro Hikita
Mr. Takehiro Hikita has graciously provided me with a large amount ofinsight into the candle pattern philosophy. I have never met anyone sodevoted to the detailed study of a concept as he. He started using candlestick analysis many years ago, in fact, all of his charting was done by handuntil personal computers became available.During a trip to Japan in January, 1992, I studied the candle philosophy and interpretation with Mr. Hikita. I also maintained a log of ourconversations, from which I have selected appropriate questions for thisinterview.Occasional editing was done to assist in clarifying his answers, definitely not to change the meaning. It became quite obvious to me, that usingEnglish as a second language resulted in a completely honest and directresponse; with no effort to be clever or entertaining. I found this to bequite refreshing and decided that you might also.1. How and when did you first become interested in investing andtrading?7 believe it was when I was around 31 years of age, that is over 25years ago. It was, however, once terminated and I stayed out of themarket for about 2 years after losing money, more than enough at thattime.
Appendix
An Interview with Japanese trader, Mr. Takehfro Hikfta
2. When did you realize that a form of technical analysis was betterthan fundamental analysis?
probably few years later. I first started trading after reading the firstissue ofShimuzu's book in 1965, the original of The Japanese Chart ofCharts translated by Nicholson.
It was when I started trading again and I was around 41 years of age,after leaving the company for some reason. Beginning with the candlestick pattern analysis, I studied and researched all different kinds ofJapanese analysis techniques with real trading, and was extended lateron to the method available in the States. My starting to trade againwas with the policy to do so based on the technical analysis and nomore guesses and fundamental analysis to make a living. I am fortunately still in the business of trading.
4. inArethecandlesUSA? used in Japan today as widely as bar charts are usedAs already mentioned in the above, there is no other method thancandlestick charting to show a market record and activity in Japan.Yes, it is being used just like the bar chart in the States. The patternrecognition is another subject within the chart analysis.
Speaking of this story a little further I started subscribing Commodities(now called Futures) and purchased many publications such as Commodity Trading Systems and Methods written by Kaufman andWilder''s publications. My first use of a calculator was the programmable Texas Instruments product on Wilder's method. Then the Casio'sprogrammable calculator for me to build in my own method, as Ibecame serious. Then to make the daily analysis much easier, I purchased the IBM-5100 with 32K memory; it was in 1977.
5. Is the word candlestick a Western term? If so, what is candlecharting and analysis called in Japan?There is generally nothing but the candlestick charting to show thetrend and market activity, and any others are classified as the analysissince they are rather clear to know the pinpoint to take an action, likethe Point & Figure chart. Speaking of the chart, we generally call it HiAshi I Daily Chart, ShuAshi/ Weekly Chart, and Tsuki Ashi / MonthlyChart. The Japanese word for candle is roshoku.
In 1979, I learned the Apple II came out on the market which has agraphic capability. I then immediately purchased it by importing directfrom the States. In 1980, I joined CompuTrac and attended their firstTAG Conference in New Orleans. My Stock & Commodities magazinesubscription started since then.
3. Did you always use candle charting for your analysis? If not, whendid you start using candle charts?
For your information, Ashi means Leg or better say Foot, and the foothas an inside meaning of the past record, that is probably from the footstamp that shows the past movement and activities, not only as amarket term but in general. I then feel the Candlefoots is better to becalled in English. It is, however, alright as long as understandable andsounds smooth to you people's ears.
6.
Do you trade stocks, futures, or both?
It was from the very beginning, as far as taking a look at the market ingeneral, to know how the market is acting. Since the candlestick charting method is the only one available in Japan to record the history ofthe price activity in graphic form. It is just like the bar chart in theStates. Regardless whether I liked it or not, it was what was used then.
Yes, I trade both. I trade actively the futures but not the stocks. Mytrading stock is a long term basis, never sale, that is in order to hedgefromterm. inflation, while trading the future is to make money in the short
But, the candlestick pattern analysis is another subject, rather than thecharting itself. My interest on how to read the pattern better was
There is other reason, it is easier to find a pivot in the futures, especially to find out a pinpoint to