Candlestick Charting For Dummies, 2nd Edition

Demystify stock charts so you can up your investing game

Candlestick Charting For Dummies is here to show you that candlestick charts are not just for Wall Street traders. Everyday investors like you can make sense of all those little lines and boxes, with just a little friendly Dummies training. We’ll show you where to find these charts (online or in your favorite investing app), what they mean, and how to dig out valuable information. Then, you’ll be ready to buy and sell with newfound stock market savvy.

Candlestick Charting For Dummies helps you build a foundation of investing knowledge and lingo (bullish? bearish? What is a candlestick, anyway?), then shows you the chart-reading ropes with relevant and easy-to-understand examples. It covers the latest investing technology, cryptocurrency, and today’s somewhat-less-predictable market environment.

• Get a refresher on stock market terminology and investing basics
• Discover how easy it is to understand price history and movement with candlestick charts
• Identify the best times to buy and sell securities, including stocks and crypto
• Learn from real life examples so you can invest with greater confidence and success

This is the Dummies guide for beginner and intermediate investors who want to make smarter decisions with a better understanding of how to read candlestick charts.

Introduction 1

About This Book 1

Foolish Assumptions 2

Icons Used in This Book 2

Beyond the Book 3

Where to Go from Here 3

Part 1: Getting Familiar with Candlestick Charting and Technical Analysis 5

Chapter 1: Understanding Charting and Where Candlesticks Fit In 7

Considering Charting Methods and the Role of Candlesticks 8

Getting a feel for your options for charting 8

Realizing the advantages of candlestick charting 9

Understanding Candlestick Components 9

Working with Candlestick Patterns 11

Simple patterns 11

Complex patterns 12

Making Technical Analysis Part of Your Candlestick Charting Strategy 12

Trading Wisely: What You Must Understand Before Working the Markets 13

Trading can be an expensive endeavor 13

Paper trading costs you nothing but time 14

Develop rules, and stick to them 14

Chapter 2: Getting to Know Candlestick Charts 17

Recognizing the Many Benefits of Candlestick Charting 18

Seeing is believing: Candlesticks are easy to read 19

Spotting bears and bulls quickly 20

Seeing into the future (sort of) 21

Showing price patterns 23

Admitting Potential Candlestick Charting Risks 25

Comparing Candlestick Charts with Alternative Charting Methods 26

Line charts 26

Bar charts 27

Point and figure charts 28

Chapter 3: Building a Base of Candlestick Chart Knowledge 31

Constructing a Candlestick: A Core of Four 32

Price on the open 32

High and low prices for the session 35

Price on the close 37

Considering Additional Information Included in Candlestick Charts 39

Volume 39

Open interest 40

Technical indicators 42

Fundamental information 43

Chapter 4: Using Electronic Resources to Create Full Charts 49

Turning to the Web for Candlestick Charting Resources 50

Using Yahoo! Finance 50

Working with Barchart 53

Charting on CNBC.com 54

Creating Candlestick Charts with Microsoft Excel 55

Finding the data for your chart 56

Making sure that the data is in the correct format 56

Building an Excel candlestick chart 57

Adding a moving average to an Excel candlestick chart 58

Adding a trendline to an Excel ca