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Candlestick Charting Explained: Timeless Techniques for Trading stocks and Sutures [Kindle Edition]

Gregory L. Morris
4.3 out of 5 stars  See all reviews (39 customer reviews)

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Book Description

Master this powerful trading system and identify the best trades

Inside this book you will discover candlestick charting, one of the most popular tools in technical analysis. Candlestick Charting Explained features updated charts and analysis as well as new material on integrating Western charting analysis with Japanese candlestick analysis, grouping candlesticks into families, detecting and avoiding false signals, and more.

Editorial Reviews

From the Back Cover

The classic Japanese candlestick reference, updated with all-new insights and tools to improve your predictive accuracy

Candlestick Charting Explained takes the subjectivity out of Japanese candlestick analysis by providing you with standardized, straightforward coverage of 89 powerful candlestick patterns. Inside you will learn what they indicate about current trader behavior and how you can use each to instantly improve your market knowledge and analytical precision.

In this revised and expanded third edition, candlestick expert Greg Morris updates his influential guidebook with valuable new material and patterns to give you:

  • Thorough coverage of candlestick patterns to allow instant analysis of investor attitude and probable market direction
  • Methods for integrating candlesticks with traditional Western charting analysis for enhanced signal verification
  • Completely new section by Ryan Litchfield dedicated to "Trading with Candlesticks"
  • Current insights into trader psychology, and how it impacts interactions between buyers and sellers

Its in-depth exploration of traditional as well as all-new candlestick charts, Candlestick Charting Explained will show you how to make candlestick charting a logical, understandable, and profitable component of your current trading program.

Empower your trading with Japanese candlestick charting

Japanese candlestick charts dramatically improve your understanding of short-term (less than a week) market sentiment, making you a much more informed and focused trader of stocks, futures, and indices. The bestselling Candlestick Charting Explained focuses on the patterns themselves and highlights the key facts you need to know to apply each pattern to your trading. For each of 89 distinctive candle patterns, its standardized format provides you with:

  • Commentary--Description of pattern and significance of its name, insights into unique features, and other concise explanation
  • Rules of Recognition--Simple rules for quick, accurate identification along with precise, day-by-day descriptions of pattern development
  • Scenarios and Psychology Behind the Pattern--Trading scenarios that could have led to the pattern's development, with general discussion of the psychology of each
  • day's action
  • Pattern Flexibility--Situations that change the pattern's effectiveness with explanations of allowable deviations from the classic pattern
  • Pattern Breakdown--Instructions for reducing the pattern to a single candle line and whether or not outside confirmation is suggested or unnecessary
  • Related Patterns--Patterns that have similar formations, could be considered variations, or are a part of this pattern
  • Example--A graphic example of the pattern to both aid in recognition and eliminate costly confusion in pattern identification

Additional information and insights present different interpretations of candlesticks based on intraday instead of end-of-day events and action, improving signal reliability. The author's unique candle pattern filtering concept, instrumental in answering the "how" question, is updated to utilize today's larger universe of stock data. An all-new chapter provides practical application and perspective traders need to view candles in the context of today's computer-driven marketplace.

For millions of traders, candlesticks have become a key tool in creating and verifying trading signals. Candlestick Charting Explained is the only book you need to start integrating their proven versatility and effectiveness into your technical trading program.

About the Author

Gregory L. Morris is a portfolio manager for PMFM, Inc., managing the PMFM Core Advantage Portfolio Trust mutual fund. One of the world's leading experts on candlestick charting, Morris is a consultant and the former CEO of, which he and a partner founded and later sold to He is the author of The Complete Guide to Market Breadth Indicators, along with numerous articles for professional publications, and has spoken to thousands of traders and investors at industry conferences around the world.

Product Details

  • File Size: 16023 KB
  • Print Length: 550 pages
  • Simultaneous Device Usage: Up to 4 simultaneous devices, per publisher limits
  • Publisher: McGraw-Hill; 3 edition (March 27, 2006)
  • Sold by: Amazon Digital Services, Inc.
  • Language: English
  • ASIN: B003WJR5PE
  • Text-to-Speech: Enabled
  • X-Ray:
  • Lending: Not Enabled
  • Amazon Best Sellers Rank: #301,538 Paid in Kindle Store (See Top 100 Paid in Kindle Store)
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Customer Reviews

Most Helpful Customer Reviews
91 of 93 people found the following review helpful
5.0 out of 5 stars Better than Steve Nison's book September 14, 2008
I had already read this book and Steve Nison's Japanese Candlestick Charting Techniques.

If you want to buy a book about candlestick both books have the same content about all the candlestick patterns and the descrition about them.

Japanese Candlestick Charting Techniques:
- has chapters about the relationship of candlestick with Volume, Support and Resistence, trendlines, Indicators (MACD,IFR,etc). This is VERY GOOD. Realy good.
- It has many examples discussed too. More than this book.

This book has:
- a chapter about Trading with Candlesticks that has content about trendlines, supports, etc.
- a lot of statistics of the patterns.

One great difference is that this book is easier to use. It has a standardized format for all the patterns with Commentary, Rules, Psychology Behind the Pattern, Flexibility, Pattern Breakdown, Related Patterns, Examples. This is VERY GOOD. It's only search the pattern and read what you want to know. It has a table with a resume about the pattern too.

Steve Nison's book isn't objective and it is not hands-on. You are reading an example, but... where is the picture?? You have to turn the pages searching the picture and them back to the curretly page to keep going. To do that for more than 300 pages is very, VERY BAD. Really. Trust me. You need to have a lot of patience.

Well, if you read one of these books, don't worry: you will know all about candlesticks. But this book is easier to use and to consult.
And it is cheaper than Steve Nison's book.

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68 of 71 people found the following review helpful
5.0 out of 5 stars Fantastic tool for learning to use Candlesticks April 17, 2007
I am quite surprised at how useful the book is for my trading. I'm currently a day trader that trades momentum. I have been starting to use Candlesticks in the last year or two to try to enhance my entries and exits. My profitable trade percentages are increasing and my trade exit timeliness is getting better (thanks to candlesticks). The whole candlestick concept was hard for me to swallow but the more I got into it, I realized it was a visual pattern recognition concept. The book does a great job of explaining all of the useful candlestick formations as well as backing the explanations up with examples. I really liked the second half of the book that did a very thorough statistical analysis of the candlestick signals over multiple timeframes. I learned alot from the book and will add its extensive data into my stock trading techniques. Well done....
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26 of 28 people found the following review helpful
5.0 out of 5 stars Novice at Candlestick Charting July 8, 2007
Great book, great content. You really need to absorb the direction of the method by reading this book 2 - 3 times. This isn't because of poor writing. This book is well written. It is due to the mindset required to fully understand the patterns for a novice like myself. I did find that it is one more tool to use to validate a trend or reversal. it has helped me with more than one profitable decision.
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15 of 16 people found the following review helpful
5.0 out of 5 stars Better than Nisson's Book November 22, 2008
This is not a book about theory and history of candlestick charts. He doesn't waste your time telling you what he thinks. Instead, this book gives specific results of candle patterns based on back-testing done by the author. He clearly defines each pattern discussed and then % of likelyhood of a reversal, continuation, and so forth. This is the kind of information that can be applied to your trading system to improve your profits.
Also look at Tharp's book, "Trade Your Way to Financial Freedom".
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18 of 20 people found the following review helpful
5.0 out of 5 stars Great Candlestick analysis March 8, 2007
Great book if you are learning about candlesticks as well as chart patterns: Reversal, continuations, etc. Detailed explanation, statistics and more...

I found it really helpful.
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10 of 10 people found the following review helpful
Mr. Morris has painstakingly explained an encyclopedia of candle patterns along with statistical data which helps to choose the most profitable and the most recurring candlestick patterns. Throughout the book, he has emphasised on the practicality of candlestick charting and to what extent should it be used. One of the major important features is the "Candlestick filtering" technique by the help of our present-day Western World technical indicators. The same helps to extract the best from the East and West.

I would suggest to Mr. Morris to add a section of Real time Charts so as to enable his readers to find out or pinpoint specific candlestick patterns (learnt from the book)and to understand to what extent the readers' surmise was correct.
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13 of 15 people found the following review helpful

I spent an hour in the book store comparing Nison's book and this one.

I should say that this book had more information than what Nison provided and it came at half the cost.

No brainer that this book was much more preferable and hence I bought it.

Having read the book, I can definitely say that my decision wasn't wrong.

I got all the knowledge desired on candlesticks with good visual pictures.

Go for it!

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14 of 17 people found the following review helpful
5.0 out of 5 stars Great stuff June 9, 2007
Format:Paperback|Verified Purchase
Morris' explanation of the candlestick system for analysis of stock price trends is very thorough and easy to understand. Remembering all of the patterns is a bit overwhelming, but you do begin to develop a sense of what the candlesticks are saying that eventually makes understanding the patterns easier.
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Most Recent Customer Reviews
5.0 out of 5 stars Outstanding.
Tops anything else.
Published 9 days ago by luke
5.0 out of 5 stars The Title Tells It All
I am still reading this book. It's not a "sit down and read it all" kind of book. I am learning how to trade stocks and options, and this book has been a excellent teacher... Read more
Published 1 month ago by Stacey White
2.0 out of 5 stars Not very good
I have another book on Candlesticks that is far superior. Don't waste time on this. Get Japanese Candlestick Charting Techniques instead.
Published 4 months ago by Hal Trussell
4.0 out of 5 stars worth the money
Very well done. One small improvement might be more informative labeling of the figures (illustrations). I would buy this book again.
Published 5 months ago by William Cavalier
5.0 out of 5 stars Must have or anyone's technical analysis arsenal
Explain in great detail with pictures and commentary and a great breakdwon on how the candle stick charts work. I am a brand new investor and this book helped my out immensley. Read more
Published 7 months ago by Kevin Tischer
4.0 out of 5 stars Candlestick Charting
The book has a lot of information that is explained very clearly. The beginner or seasoned trader could use and understand why.
Published 8 months ago by Loren L. Thorp
4.0 out of 5 stars Interesting read
I was looking to find a book to better explain candle stick charting and this did the trick. Not always light reading but the subject requires that at times.
Published 10 months ago by tim scalpone
5.0 out of 5 stars In depth look at candle stick charting
Excellent book on candlestick charting. It covers all the basics a trader needs and some further patterns that are not as common.
Published 11 months ago by Paul J. Crockford
5.0 out of 5 stars GREAT REFERENCE BOOK
Published 12 months ago by Robert M. Sullivan
3.0 out of 5 stars Comprehensive and limited at the same time
The book has an exhaustive list of candle patterns with explanations and statistical data. You will notice fairly soon that there is quite a bit of repetition, as well as slight... Read more
Published 12 months ago by Simple Student
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More About the Author

Gregory L. Morris is Sr. Vice President, Chief Technical Analyst, and Chairman of the Investment Committee for Stadion Money Management, LLC. He also serves as the chairman of the Station Trust Board. In this capacity Greg educates institutional and individual clients on the merits of technical analysis and why Stadion utilizes a technical rules-based model. Greg oversees the management of over $6 Billion in assets in six mutual funds, separate accounts, and retirement plans. From December, 2003 to May, 2005, Greg served as a Trustee and advisor to the MurphyMorris ETF Fund. He also served as Treasurer and Chief Executive Officer of MurphyMorris Money Management Co, the Advisor to the Fund.

Greg has written three books with McGraw-Hill; The Complete Guide to Market Breadth Indicators, a book introducing market breadth analysis for investors, a third edition (original edition in 1992) to his best-selling and vastly expanded Candlestick Charting Explained was released in March, 2006, and Candlestick Charting Explained Workbook, which was published in December, 2011. Greg recently completed his fourth book, "Investing with the Trend - A Rules-based Approach to Money Management" published by John Wiley under the Bloomberg Press label. This is a book about the flaws of modern finance, research on risk and trend analysis, and how to build a rules-based trend following model. In 2011, Greg produced Japanese Candlestick Pattern Recognition software for MetaStock. This is an add-on package that not only offers automatic identification of real patterns, but provides a sophisticated trend analysis measure and automatic support and resistance identification.

Greg is a member of the National Association of Active Investment Managers (NAAIM) where he currently chairs the Wagner Paper Contest, the American Association of Professional Technical Analysts (AAPTA), and the Market Technician's Association (MTA). During college he was a member of the American Institute of Aeronautics and Astronautics.

From 1996 to 2002, Greg was CEO of MurphyMorris.Inc., the leading provider of web-based market analysis tools, education, and commentary. MurphyMorris, Inc. was acquired by, Inc. in October, 2002. In 1999, Greg and three associates started MurphyMorris Money Management Co. to manage assets for individuals. This focus was later changed to address the firm becoming the Advisor to the MurphyMorris ETF Fund in January, 2004, and later merged into the Stadion (PMFM) family of funds.

From 1994 to 1996, he was President of G. Morris Corporation, a Dallas, Texas headquartered business that provided products and services for investors and traders. His lead product was a series of over 450 Indicators & Trading Systems that supported most windows-based technical analysis software packages. From 1993 to 1994, Greg was part of MarketArts, Inc. which launched the first windows-based technical analysis software program, Windows on Wall Street.

In 1992 he published a book on Japanese candlestick analysis called CandlePower, now available in soft cover as Candlestick Charting Explained (McGraw-Hill). Widely recognized as an expert on candlesticks and the developer of candlestick filtering, he has lectured around the world on the subject. From 1982 until 1993, he worked in association with N-Squared Computing, producing over 15 technical analysis and charting software titles, many of which are actively used today. In May, 1989, he was awarded outstanding alumni for 1989 from Pratt County College.

Greg earned his pilot's license in 1967 and flew many versions of Cessna (Cessna 150 maximum takeoff weight = 1,500 pounds) and Mooney single-engine aircraft. During his 7 years as a Navy pilot he flew the T2-C Buckeye, A-4J Skyhawk, and his favorite military jet, the F-4J Phantom. While in the Navy, he logged over 240 carrier landings (103 at night) and exceeded twice the speed of sound. From 1978 to his retirement in 2004, Greg was a Captain for Delta Air Lines flying the Boeing 727, Lockheed L-1011, McDonald Douglas MD-88, MD-90, Boeing 757, Boeing 767, and his favorite airliner, the McDonald Douglas MD-11 (maximum takeoff weight = 625,000 pounds). With his private pilot time, the Navy fighter pilot career (1971 - 1978), and airline career he accumulated 21,000 hours of flying time, and as he likes to say, never put a scratch on an airplane.

He graduated from the University of Texas at Austin in 1971, has a BS degree in Aerospace Engineering, has authored numerous investment-related articles, speaks at numerous seminars and investment groups, appeared many times on Financial News Network (FNN), Fox Business, CNBC, and Bloomberg TV. Greg was featured in Investor's Business Daily in December, 2007, Business Week in July 2008, Barron's in January, 2009, Stocks and Commodities in September, 2009, and Bloomberg Markets in May, 2011. Greg has been invited to Italy, Brazil, Vietnam, Canada, Hong Kong, Singapore, and China to lecture on the merits of technical market analysis. From 1971 to 1977, he was a Navy F-4 fighter pilot aboard USS Independence who was selected for, and graduated from, the Navy Fighter Weapons School known as Top Gun. Greg and his wife, Laura, live in the mountains of North Georgia.

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