Japanese Candle Stick Charting

Main point is:  Know where you are in the trend.   This provides context to the pattern
Reversal Patterns - Only means trend is at risk of not continuing
Ch 4. - Reversal Patterns

Hammer and Hanging Man
1. Real body is at the upper end of the trading range, the color is not important
2. Long lower shadow is greater than 2x height of body
3. No, or very short upper shadow
Must wait for confirmation with the hanging man (the market top).  The larger the gap between close of hanging man and open of the next day the better.

Engulfing Pattern
1. Real body must engulf prior real body
2. Opposite color, unless almost a doji

Dark Cloud Cover
1. After uptrend
2. Strong white day, which opens on its low, closes on it high.  The next day has a long black body, opens on its high, closes on its low
3. Closes well within (about 50%) in the white body
4. Black body (2nd day) opens above a major resistance level and then fails.  Old support can be used as a resistance level

Piercing Pattern - same as above except opposite (also less reliable)

Ch 5. - Stars - Small real body that gaps away from the large real body preceding it.  As long as the star body does not overlap the previous body it is considered a star.  Color not important

Morning Star and Evening Star (opposite)
1. Tall black real body, followed by small real body which gaps lower, followed by white real body that moves well within first period black real body.
2. Gap on 3rd day is not always necessary
3. Volume on 3rd day > volume on 1st day

Shooting Star and Inverted Hammer (opposite of hammer / hanging man)
1. Small real body at the lower end of its daily range and a long upper shadow, color not important
2. Real body that gaps away from previous real body
3. Wait for verification that a reversal is taking place by looking for a gap in the reversal direction outside the real body
4.