Zen and the art of ‘piston power’ charting

I’d keep doing this just for the hell of it…

Even if there was nothing to ‘gain’ in the end.

It’s a mental workout so satisfying when all the clues fall into place, and I get that first glimpse of clarity, that I’d probably pay to do it.

(The fact you can actually make obscene amounts of money from it is just the cream on top!)

So, what is this secret pleasure I’m prattling on about?

Analysing Price Action.

Or, more specifically: analysing price action through the lens of candlestick charts.

Nothing new there you might think. But I think there’s an extra layer of insight that most traders are missing…

The problem is it’s easy to get blinded by the semantics of candlestick pattern names because they sound so mystical and otherworldly:

Spinning tops… High waves… Doji’s… Dark Cloud Cover… Harami Cross… Evening star…

The list goes on.

And I’ve seen traders (in popular online forums) arguing like crazed berserkers over the ‘correct’ definition of a pattern.

As if it matters!

Because what they’re missing is true value in what the candlesticks are SHOWING you.

Remember the candles are only symbolic of the underlying price action. There’s nothing special or magical about the pattern definitions or names themselves.

Rich’s Top Tip for ‘Zen-Master’ Candlestick Charting:

Think of the candlesticks as little pistons…

And there are two opposing forces at work upon the pistons: the buying force, and the selling force.

Each of these forces will try to push the candlestick as far as possible in their preferred direction. And they’ll each try to resist and hold as much of their own territory as possible.

That’s all there is to it!

If you follow the ups and downs on the chart, the trends, the breakout moves, the areas of congestion, and think how those little pistons have been forced, pushed, and manipulated, by market forces you’d need look no further.

The entire story each market has to tell is laid out in fine detail – if you only have eyes to see.

Of course, it does help if you have a knowledgeable companion to assist you…

And like Paul McN said over in the FX Flow Facebook group:

“If you are interested in candlestick formations you can’t get better than Steve Nison and his Japanese candlestick charting techniques.”

And I couldn’t say it better myself.

So, if you’d like to build a deeper knowledge of candlesticks, and how they can be used to drill into the price action of financial markets, look out for…

1) Japanese Candlestick Charting Techniques (Steve Nison): the definitive ‘bible’ of candlesticks.

2) The Candlestick Course (Steve Nison): the ideal training tool for newcomers, and for veterans looking to hone their skills.

Both these books are available on Amazon but they’re a bit pricey. Keep an eye out for pre-owned copies and grab one whenever you can. They’ll more than earn their place on your trader’s bookshelf.

Until next time…

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