Ichimoku Ecourse

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TABLE OF CONTENTS
Lesson 1) Introduction to the Candlesticks Chart .......................................................... 5
Construction of the Candle Line ........................................................................................ 8
Lesson 2) The Individual Candles ....................................................................................... 10
The Shadows ........................................................................................................................... 21
Lesson 3) Two Candles Patterns ......................................................................................... 30
The Checkmate Principle ................................................................................................... 30
The Bullish Engulfing Pattern .......................................................................................... 32
The Dark Cloud Cover ......................................................................................................... 41
Piercing Pattern ..................................................................................................................... 45
The Harami .............................................................................................................................. 50
Lesson 4) Three-Candle Patterns........................................................................................ 53
The Morning Star .................................................................................................................. 53
The Evening Star ................................................................................................................... 56
Lesson 5) Principles of Trading ........................................................................................... 59
Risk-Reward ............................................................................................................................ 59
Stops ........................................................................................................................................... 64
Lesson 6) Indicators ................................................................................................................. 65
Confluence................................................................................................................................ 65
Change of Polarity................................................................................................................. 66
Internal Trend Line .............................................................................................................. 66
Head and Shoulders ............................................................................................................. 67
Oscillators................................................................................................................................. 68
4
Divergence ............................................................................................................................... 71
Bollinger Bands...................................................................................................................... 73
Fibonacci Retracements ..................................................................................................... 75
Lesson 7) The Ichimoku System.......................................................................................... 78
The Tenkan-Sen ..................................................................................................................... 79
The Kijun-Sen ......................................................................................................................... 80
The Chikou Span .................................................................................................................... 83
The Ichimoku Cloud ............................................................................................................. 84
Calibration................................................................................................................................ 86
Lesson 8) How to Use the Ichimoku .................................................................................. 88
The Kumo ................................................................................................................................. 88
The most important trading strategy! ......................................................................... 97
Lesson 9) The Advanced Trading Strategies................................................................ 101
The Relative Tenkan/Kijun Cross ................................................................................ 101
The Kumo Breakout ........................................................................................................... 106
The Kijun-Sen Cross ........................................................................................................... 109
Lesson 10) Money-Management and the Kelly Criterion ....................................... 121
5 Lesson 1) Introduction to the Candlesticks Chart
LESSON 1) INTRODUCTION TO THE CANDLESTICKS

CHART
Hi! My name is name and I am going to teach you in this course how to make
money trading Forex utilizing the Ichimoku. First, we are going to learn about
how to profit in the Forex markets with Candlesticks. Later, I will teach you
how to use the Ichimoku System profitably and successfully, with a slight
addition I have made to that framework.
Forex trading has become the most popular form of trading recently,
and there are several reasons why.
1. Few markets are monitored few pairs
2. Leverage
3. Easy to set-up an account
The highest amount of speculators is in the Forex markets, and the
standard way people chart in the Forex markets is by using the Candlesticks.
However, most people make several mistakes while reading the markets with
the Candles, and I am going to teach you how to do it properly, and profit from
their mistakes.
Candles are geared for short-term trading, from intraday to a couple of
weeks. They have become so popular in the Forex markets that there are
hundreds of books that will teach you how to use them. And let me tell you
something, most of them will teach you the wrong way to use it.
The Candles are said to have been developed by 18th century legendary
rice trader Homma Munehisa. He came from Sakata in Japan, and he traded in
the Ojima Rice market in Osaka during the Tokugawa Shogunate, and his
trading success led to him becoming an honorary Samurai.

He described the market as the rotation of the Yang (a bull market) and
Yin (the bear market) and claims that within each type of market, we can see a
glimmer of the other type.
If you think youre a successful trader, you have no idea how much
money he made. He made more than $100bn in profits at todays prices, some
years earning over $10bn.
For its reliability, this style of charting has become very popular in all
markets. From stocks trading to the Forex markets.
I will teach you specifically how to use the Candlesticks charts to profit
in Forex in this first part of the book. In the second part, I will teach you how
to use the Ichimoku in conjunction to the candles in order to profit even more!
This book will give you the tools necessary for you to make as much money as
you want!
Even though some books you can buy on the subject will give you the
basic insight into the Candlesticks, the authors usually dont teach you the
strategies, tips and secrets to the Candles. I will teach you everything I know. I
wont hold anything back. And this is why this course is so valuable.
I will reveal all the best strategies that both institutional traders and the
best traders in the world use to profit from Forex.
And let me tell you an insider secret: a lot of people are misusing the
candles. They think they know what is going on, but they truly dont.
The Japanese use a lot of metaphors while teaching the candlesticks, and
I will try to be as faithful as I can, so you can actually learn how to think like
the great master traders in the world. Not just know what they know, but
think how they think.
I will also give you tens of real-world examples, so you can get all the
patterns ingrained in your mind.
First, I am going to teach you how to create the candlestick lines and
how to read them instantly. There is a lot more information in a single

candlestick bar than most people imagine. You are going to learn how to find
the balance between the bears and the bulls in the market easily.
Second, we are going to learn how to read the candle patterns, and how
to use them correctly. They are the real power behind the candlesticks.
Third, and this you are not going to find anywhere else, you are going to
find out about the differences between Forex and non-Forex candlestick
trading. And this is where most people make their most costly mistakes.
Fourth, you are going to learn how to create your trading strategies, and
how to combine the candlesticks with western indicators.
Fifth, you are going to learn about how to successfully trade intraday
Forex with candlesticks.
And then we are going to learn about the Ichimoku System and how this
complete course into the Japanese trading secrets will increase your
understanding of the market.
By understanding this course completely, you will be able to:
Spot market turns before the competition
Know when to act on a candlestick signal, and when not to act
on the signal
Know which trades to avoid by using probabilistic analysis
Analyze the situation completely, not only the candlestick
signals
Learn how to use the Ichimoku System
Learn how to trade profitably with the Ichimoku System
Learn my modified trading strategies for the Ichimoku System,
and how they will give you the most bang for the buck
Learn how to increase your money-management skills
effortlessly

So essentially, by the end of this course, you will be able to trade like a
pro. And not just any professional trader, but you will be able to trade better
than most pros in the world.
Lets begin.
CONSTRUCTION OF THE CANDLE LINE

I know that a lot of you already know all about this, but it doesnt hurt to
go through it again. This is the foundation for this whole course, and
everything will be based on this first lesson and drawing the candlestick line.
Heres a simple diagram where you can see all the components of the
Candle Line:
The candlestick line is made of four data points:

Open

Close
High
Low
The Real body is made of the Open and the Close, it is the relationship
that forms the real body. The white real body means that the Close is higher
than the Open; conversely, if the close is lower than the open, the real body is
black.
By the way, you can use candlesticks at all time frames. I would suggest
you look at daily, 60 minutes, 30 minutes, and 15 minutes. If you trade a lot
intraday, and your holding period is very small (3 hours or less) you could
look at 60 minutes, 30 minutes, and 15 minutes.
The reason why some candlestick signals are constructed differently in
the Forex market is because the market is always open, but we will look into
that later.
The lines above and below the real body are called the shadow; they are
called upper shadow and lower shadow. The high of the upper shadow is the
high of the session, while the low of the lower shadow is the low of the
session.
One benefit youll be walking away with at the end of this course, is by
combining the candlestick patterns with a couple of western indicators and
the Ichimoku System. You will walk away with an incredible amount of
knowledge, that you cant find anywhere else.
Let me tell you a secret: everything you do with a bar chart you can also
do with candlesticks. If you learn the candles, you can use the bar chart too!
And this is why, if you have used the bar charts for most of your life, you can
now add the visual insight of the candle sticks into your analysis.
Lets take a look at each individual single candles now.
10 Lesson 2) The Individual Candles
LESSON 2) THE INDIVIDUAL CANDLES

The Japanese would say that the real body is the essence of the body
movement. They say that the candlestick color is the force behind the move. If
we have a long white body, the bulls are the majority. And if we have a long
black body, we have a bearish majority.
But realize that the real bodies are in constant change, and as they grow
wider the prior trend is gaining strength, and as they get smaller, the prior
trend is losing strength.

Until you get the Spinning Tops, candle lines with small bodies. Realize
that as the real bodies get smaller, we are learning very subtle information
about the market. We are learning that the market may be gaining, but it
might not have the strength we need in order to make those big bucks.
The limit for the length of the real bodies is the Doji, or the small
crosses. As they get a little bit bigger, we find the Spinning

Tops:
For instance, see in the example below how when the market started
losing its momentum, the candles got smaller and smaller. All you could see
was spinning tops or Doji. Whenever I take screenshots from my software,
you will see colored candle lines. I do this so you can get accustomed to both
color sets, white and black or green and red.
Can you see that even though the market had a negative trend, its trend
began to lose strength? You could even see some strong bull real bodies out
there. The bears control of the market is getting weaker and weaker. Look at
the rounding bottom of the candle lines in the chart, I would definitely buy in
this position because I also have a clear stop-loss, the smile.
Now lets take a look at Doji. A Doji is when the opening and close is the
same, and they are very good at showing trend reversals. It is often a turning
point, because Doji means that the market is tired.
A lot of people make the mistake of thinking that when the market is
Bull, and a Doji appears, you have to short it. Thats completely wrong. The
Doji doesnt mean that the market is dead, it just means that the market is
tired and could be taking a breath before continuing its run.
Dont make this mistake. Heres an example of that mistake:
See? If you had shorted when you saw the Doji you would lose a lot of
money. Just take the Doji as a signal that the market may be changing its
trend, not that the market is DEAD or BULL. Take it as if the market is turning
neutral.
With all technical analysis, we are thinking of the probability set of each
event occurring: a trend-reversal, a big run-up, etc. You have to realize that all
the Doji is telling us is that the probability of the market going in the other
direction increased a little bit. Thats it.
And in there is a point Id like to make here: In the Forex market, you
are not going to be seeing perfect Dojis like the one I just showed you. You will
most likely be seeing very thin bodies. Consider that as a Doji, for the
purposes of your technical analysis.

And even though I will teach you this in depth later, you have to realize
that you should always look for confirmation for the candlestick signals. Dont
go around buying a trade because you saw a single signal, always wait for the
confirmation. I know that some people dont like to wait for the confirmation
for taking the trade, because usually the profit potential is smaller. But you
have to understand that it also increases your risk. Ill later explain it with a
little bit of math why I think that it is best to wait for confirmation.
And what about the fundamentals? I will dedicate an entire chapter
about this later on, but just realize that the price will always reflect the
fundamentals. Therefore, if you see an unusual move in the markets, it is
probably because the fundamentals have changed.
Just realize this, and know that sometimes you will enter a trade and the
fundamentals will change while youre with the open trade, so if you see an
unusual movement in the opposite way you want, you should cut your
position from your books.
And remember, as long as the real body is really small, take the small
Spinning Tops and the Doji as the same signal.
Let me point out to you the difference between two Dojis, right before I
explain to you the role of the Shadow.
In this instance, what we see is that even though in both situations a

Doji occurred, in the first one the Upper Shadow was a lot higher than the
Lower Shadow in the second situation. What does it mean? Well, think of it
this way: In the first situation, the market tried to go even higher but it didnt
accept the new higher levels.
While on the second situation, it tried to go up and down, but it formed
a Doji in between.
I would be a lot more worried about the first situation, because the
market didnt accept the new high levels than in the second situation. Even
though both are Dojis, the first situation carries a lot more risk if you are
bullish than the second one if youre bearish.
Lets see an example of all of this I have been teaching you:
First Lesson: Not every Doji means a trend reversal. See B and D.
Second Lesson: Sometimes a really thin body gives the same signal than
a Doji. See C.
Third Lesson: Look at the Long Shadow in B. What does this means? It
means that the market is still not sure about the new lower levels, the market
is not strong enough.
Fourth Lesson: Look at the Long Shadow in A. The market rejected
higher levels, again.
I am showing you this so you can realize that in Technical Analysis, price
is king. Even if you had the perfect analysis, it doesnt matter unless you have
correctly predicted the market. And the Doji is not the best indicator of a
reversal, it is a good one, but alone it doesnt carry a lot of strength.
Here you can see that the Doji is confirming the resistance lines. It is
useful to realize that the candlestick lines can be confirmation for other
technical indicators, including support and resistance analysis.
And how do you use the Doji as resistance? Unless the Doji closes above
the highest high near it, it is unlikely that the market has strength. But that
doesnt mean that because the Doji closed below the resistance, that the
market is weak. It just means that the market has lost its steam. I will repeat
this over and over until you have this tattooed to your mind, because I dont
want you making the same mistakes as most candlestick chartists.
Let me give you an example of resistance change because of the Doji:
Create resistances as you always do it: the highest high is the new
resistance. And remember, let the market prove to us that the bulls are in
control of the market: if after a Doji, in the next session the market closes
above it, it is a very good signal that a breakout is happening.
And before we go further, please understand that you should always
take a look at two characteristics when analyzing a candlestick chart: always
look at both the shape of the candle, and the trend preceding it.
Lets take a look at an example illustrating this principle.
Lets take a look at the first situation, as you can clearly see, the market
was neutral right before it. When I mean preceding trend, I mean the 3-4 ticks
before the Doji. So when the Doji happened, it didnt tell us much.
At the second situation, look to the preceding bear trend and how in the
session preceding the Doji, the market tried to go deeper but didnt find the
strength to do it. Then, the Doji had a higher low than that preceding session,
which showed us that the market was tired of getting bear. The next tick what
happened? The market had a slight up-tick.
And what about the third case? The market was clearly on an uptrend,
and it lost strength as we can see by the Doji. Then the bears controlled the
market for a couple of ticks, before the uptrend continued.
Remember to always see the candles in the context of the session. Dont
look at a Doji and automatically short it. Or automatically buy the trade. Look
at the whole, instead of looking at only these little signals.
THE SHADOWS
The Japanese would say that the longer the shadow in relation to the real
body, the weaker the signal.

For instance, a big upper shadow in a big white real body is a worse
signal than if the real body had no shadow at all. Conversely, a big lower
shadow in a big black real body is a worse signal than if the real body had no
shadow at all. Example:
As you can see, the second candles are worse than the first ones, always.
They are always sending a weaker signal than the first ones. Why? Well,
because the market didnt have the strength to close at its high (or low).
The shadow is measuring the psychology of the markets and their
strength, just like the real bodies.
The upper shadow suppresses the rally.
They become important whenever they are confirming a support or
resistance area. If a lot of long upper shadows are near the same resistance
area, but they are not able to close at the high, this means that the market may
not be ready to break that resistance. The market is rejecting higher levels.
Lets take a look at how the shadows would influence our analysis of a
trend. Take a look at the example below:
Both trends had the same open and the same close. The second,
however, has a bigger shadow.
Which one do you think is the most trustworthy trend? The first one, of
course. In the second case, the market didnt have the strength to go higher
and just came back in. This means that the bulls still do not have a lot of
strength in the market, therefore, it is riskier than the first case.
So a bearish shadow, is a whenever there is a cluster of big upper
shadows. Heres an example:
In the first case, you can clearly see the bunch of upper shadows and
you can even create a resistance line over there. In the second situation, you
can clearly see that the bottom shadows have a bullish trend, and they are
huge too. That is a bullish sign.
Lets take a look now at how the bearish cross creates the resistance,
heres an example of that:
As you can see, the resistance is always at the highest high, it doesnt
matter what the other shadows are saying.
Even though I said that single shadows are not important, as always,
every rule has an exception. In shadows, this means that you see either a
Hammer or its bear counterpart, a Shooting Star. And this is the same in Forex
and Non-Forex
Heres how a hammer looks:
The Hammer is a one-sided shadow, and the hammer is a very long

lower shadow candle, and the real body can be white or black, and the
important thing is: its shadow has to be at least 2-3 times bigger than the real
body. It can have a tiny upper shadow too, at most around 10% the lower

shadow. The hammer doesnt mean that the market is going to rally, you
should just think of it as a new support. Heres an example:
What you should do is, if you buy this hammer your best stop loss would
be on that support line that I just drew.
And what about the shooting star? Heres an example of the shooting
star, and you will see that it looks pretty much like an inverted hammer. It can
also have a small lower shadow by the way. The color of the real body, again,
doesnt matter.
That is just a small example of what a Shooting Star looks like. And it
usually signals that the rally might be losing its strength. Not surprisingly, the
Shooting Star is a resistance area.
So, if there is an extremely long shooting star and by the time it is
formed, and you have a bad risk-reward, dont do the trade.
Remember how to ignore a trade? You ignore it if it has a bad riskreward.
So what would you do? Well, put an alert on the resistance and if the
prices ever go near the resistance but dont have the strength to breakout, you
can short the trade.
Now lets talk about High Wave Candles.
The high wave candle is a combination of the Hammer and the Shooting
Star, what you get is this:
They have very long shadows both above and below a small real body,
and the color doesnt matter.
What does it mean? It means that the market rallies, but by the end of
the session it pulls back. The market is really confused, and doesnt know
what it wants to do.
So what we do is compare the High Wave Candle with the prior candle.
For instance:
Did the market have a sense of direction prior to the High Wave Candle?
Sure it did. The candle before had a long real bullish body. What does it mean?
It means that the trade went from a bullish, to a neutral. Use the top as its
resistance area, as usual.
These are the last single candles that we are going to study. Lets move
forward now, towards the patterns.
30 Lesson 3) Two Candles Patterns
LESSON 3) TWO CANDLES PATTERNS

Lets take a look now at the trading patterns that you will constantly see
when analyzing your candlestick charts.
But first, I want to talk to you about the Candlestick Chart as a system.
The Candles were not designed to work alone, they were designed to work
together with other indicators, therefore, the candlestick chart is not a system.
It should be used as a PART of a system.
In this book, we will use all these candlestick principles together with
the Ichimoku System in order to make our biggest gains. We will also use a
couple of western indicators in order to assist us with our market predictions.
I will repeat again, candlesticks are not a system. They can only be used
in conjunction with another system. Remember that, as we follow through
with our course.
THE CHECKMATE PRINCIPLE

The checkmate principle is not really a candlestick pattern, but we are
going to be using these candles to see how the market reacts instead of how it
should react.
A Bearish Checkmate is a series of tall white candles followed by black
candles. A Bullish Checkmate is the opposite.
Lets take a look at one example:
As you can see, we were had a long white candle, followed by a small
black candle, then another big white candle followed by a big black candle,
followed again by a big white candle and so on As you can see, this is a
bearish checkmate.
What happened is, the market began losing strength. Lets take a look at
a bullish checkmate now:
As you can see from both areas, the bears had the market but started
losing control. This is a bullish checkmate.
What are you supposed to do when you see a checkmate? I dont mean
just a single bar in a different color, bu this alternation of bars going on and
on
You should cut back on your bear position, and in the first case, you
should cut back on your bull position.
Making money is also a matter of managing risk, and it just got riskier
and riskier as the market was being checkmated.
Lets take a look now at the first pattern, the Bullish Engulfing Pattern.
THE BULLISH ENGULFING PATTERN

Because the Forex market is open 24 hours a day, the bullish engulfing
pattern is slightly different in Forex than it is in Non-Forex Markets. That is
because the close is always the same as the open in the next candle. Heres an
example so you can see what I mean exactly:
This is the Bullish Engulfing Pattern. As you can see, the second white
candles real body completely engulfs the first candles black real body. This is
why it is called the Bullish Engulfing Pattern.
Even if it is just a pip or two of a difference, it is already a Bullish
Engulfing Pattern. Heres an example taken from a real trading session:

And the smaller the first bar, the better. It is a signal that the bear
market is losing strength. As a side note, in non-Forex, you want to see the
open lower than the previous close. Heres how you would create a support
based on the Bullish Engulfing pattern, and also notice how the first candle of
the pattern is a high wave candle. This gives even more strength to the signal
that the bears are losing the market.
But how do you trade with it? You measure the risk-reward. If you put
in a stop right below the support, you have a pretty good risk-reward ratio.
Heres how I am looking at it:

Lets take a look at a different example so you can completely
understand this pattern:
Here you can see two bullish engulfing patterns in a row, and both first
candles were High Wave Candles. What does this teach us? It teaches us that
the bear market is losing strength and it gives more strength to the pattern.
Now what about the Bearish Engulfing Pattern? Well, as you can see it
doesnt change much:
But now, the market was in a bullish trend and the bearish engulfing
pattern occurred. Remember that for every pattern, you must see the
preceding trend too. Here, the bulls have been taken over by the bears, at least
momentarily.
Lets take a look now at a real example from a trading session, and see
how the analysis would proceed:
As you can see, the first candle of the Bearish Engulfing Pattern was
again a very high wave candle. Again, this signals to us that the trend is losing
strength, giving strength to our theory that the market will turn bear.
How can we add even more strength to a Bearish Engulfing Pattern?
Take a look at this case:
First, look at the number of candles that the Bearish Engulfing Pattern is
eating up. 3 whole candles, and almost a fourth one. That is a very strong
signal. Now take a look at the previous candles, all of them have very long
shadows, giving us the signal that the trend may be losing its strength.
Just because the bearish engulfing pattern is this strong, it doesnt mean
that the sky is falling down. But the chances of we making money with the
trade just increased by a lot.
Dont think that because the black candle in the bearish engulfing
pattern has engulfed 3 candles, it means that the market is 100% certain to go
down. Think that the probability of the market turning has increased, and
more than if the black real body had engulfed just a single candle.
And remember that the trend preceding the bearish engulfing pattern
has to be bullish, and conversely, the trend preceding the bullish engulfing
pattern has to be bearish.
Lets see an example of one of the many mistakes that rookie traders
make:
As you can see, it looks exactly like a bearish engulfing pattern. Except
that, there is no definite preceding trend. The market is slightly checkmated,
and doesnt know where to go for at least the past 9 candles. Dont short
unless the preceding trend is clear.
Heres an example of both Engulfing Patterns:

As you can see, as with every trading opportunity, sometimes the
engulfing patterns dont exactly work as expected. Even though eventually the
market did go bullish in the first situation and in the second situation the
market went into a down trend, never treat any pattern with certainty.
Lets compare now two situations, this one:
And this one:

What is the difference between those Engulfing Patterns?
Can you see the size of the relative sizes of the real bodies in the first
case? Wouldnt you say that the white real body is really big compared to the
black real body in both Bullish Engulfing Patterns?
What about in the second situation? Can you see how in the first and
second case, we had two candles of slightly the same size?
You should always be more confident of the first situation than in the
second situation: the bigger the relative size between the candles of the
Engulfing Pattern, the better.
Related to the Engulfing Pattern, we have the Dark Cloud Cover.
THE DARK CLOUD COVER

Heres the Dark Cloud Cover:
The Dark Cloud Cover is characterized by the fact that the second candle
in a bullish trend opens at the same level as the prior candle, but the black real

body closes deeply into the long white candle, at least more than half the
white real body.
Heres a trading example of the Dark Cloud Cover:
As you can see, the market was bullish but then the Dark Cloud Cover
occurred. Remember that you can only take in consideration any signal or
pattern, if you have the correct preceding trend.
The dark cloud cover is a sign of uneasiness at a high price, as the
Japanese would say. The high of the dark cloud cover should be a resistance,
as you can see here:
Lets see another trading example of the Dark Cloud Cover and its use as
a resistance area:
As you can see, the resistances worked flawlessly. Even though

eventually the market did break through them, it required an incredible
amount of strength.
You have to treat the dark cloud cover the same way you treat the
bearish engulfing pattern: if the market was in a bullish trend, it is now
slightly neutral. This doesnt mean that the market is going to fall, but it adds
to the case.

And what is wrong with the two patterns below? Why arent they dark
cloud covers?
As you can see, there is no trend at all in any of these dark cloud covers.
You have to remember that the preceding trend is as important as the pattern
itself.
Heres an example of where the trend is right, but the size of the real
bodies is wrong:

And even though in the first situation the candle looks like a shooting
star, its lower shadow is bigger than it should be. Remember how we want to
use the candles as a tool to see if the market is shifting psychology? What does
this mean? It means that the first candle of the dark cloud cover should have a
long white real body, it should not be a spinning top. For instance:
As you can see, both real bodies are relatively small, and the market is
trendless. This is not a dark cloud cover, because there is no definite trend and
the first real body is not long. The market didnt shift psychology, it didnt
change the way it thought. What we want to see is real shift in psychology.
Lets see now the bullish counterpart of the Dark Cloud Cover, the
Piercing Pattern.
PIERCING PATTERN
Heres the Piercing Pattern:
As you can see the piercing pattern occurs, when in a downtrend, the
white real body of the candle is bigger than half the black real body of the
preceding candle.
Lets take a look at a trading example:

As you can see, this is a very strong Piercing Pattern. We had a very long
black real body, with very long shadows, preceding a long white real body
candle.
Here we have an example of the Piercing Pattern as a support area:
And as you can see, you should always use the low of the piercing
pattern as the support.
Lets take a look at a couple of complete examples now, and I will point
out everything you have learned so far.
First we can see a clear Piercing Pattern and in the second situation we
can see the market breaking through the support line of the Piercing Pattern
with a hammer, followed by a bullish engulfing pattern.
Heres another example with a couple of patterns you have already
learned to spot:
As you can see, you can already spot a lot of patterns in any given
trading situation. Right next to the shooting star, there is a pattern that looks
like a piercing pattern. However, the market was in an uptrend.
What about the support levels in the situation above, and the riskreward analysis?
It is simple, and you have learned how to do this too.
As you can see, the risk-reward profile is pretty good.

Lets take a look now at the Harami.
THE HARAMI
The Harami has a very specific definition: it is a very small real body
following a very long real body. The second real body has to be with the
opposite color, and can be a spinning top or a doji. The Harami usually means
that there is a change in the flow of the market like most two candle patterns,
so you must always be aware of the Harami. Heres how it looks:
However, it doesnt have such a strong support/resistance importance

as the Engulfing Patterns, the Piercing Pattern and the Dark Cloud Cover.
Heres a real trading example of the Harami:

As you can see, it has to be a very small real body and a very long prior
real body. In this case, we had a bearish harami, lets see a bullish harami now:
You can also see in this case that the second candle was also a high wave
candle, followed by another high wave candle and a doji. This is definitely a
signal that the preceding trend is losing strength.
Consider the strength of resistance as going down, from the Engulfing
Pattern to the harami. You shouldnt even use the harami as a resistance area,
it is not needed.
After learning about single candle patterns, and two candle patterns,
lets move on to three candlestick patterns now.
53 Lesson 4) Three-Candle Patterns
LESSON 4) THREE-CANDLE PATTERNS

Lets expand our knowledge now of candlestick patterns by taking a
deep look at the three-candle patterns. We will first learn about the morning
star, and then we will take a look at the Evening Star.
THE MORNING STAR

Whenever the market is going south, and we find a very long black
candle followed by a small real body candle (usually black in Forex, but it can
also be a very small white candle) followed by a very long white candle, we
have the morning star. Heres the ideal morning star:
However, it can also look like this:
The important thing is that the second candle must be deep in the first
black real body. The Morning Star can be seen as a Bullish Engulfing Pattern
that is also a part of a delayed Piercing Pattern.
Heres how the ideal morning star looks in a trading session:

And heres how the second type of Morning Star looks on the Forex
market:
Is the third candle deep into the first candles black real body? Yes.
Is it preceded by a spinning top or a doji? Yes.
Is it preceded by a bearish trend? Yes.
So we have a Morning Star. Now lets take a look at how the morning
star can confirm a support area for us:
As you can see, we now have a pretty well defined support area to trade.
If the prices go down to that levels again we can confidently trade them.
You should always use the lowest low of the candlestick patterns in
order to create your support area.
Now lets take a look at the next pattern, the Evening Star.
THE EVENING STAR

Everything that applied to the Morning Star still applies to the Evening
Star. Heres how the ideal Forex Evening Star looks like:
It is the exact reflection of the Morning Star. Lets see a real Forex
Market example for it:

I wont say much about it, because it works exactly like the Morning
Star, except that it turns the market bear.
59 Lesson 5) Principles of Trading
LESSON 5) PRINCIPLES OF TRADING

Lets talk now about the principles you should always have in mind
when you trade. I know it may sound boring, and you want to learn how to
trade with the Ichimoku, but we have to talk about this before we go on.
First, Im going to talk about Risk-Reward. You should never forget
about it when trading, never. This is because you may have a perfect signal,
but with a crappy risk-reward you are not getting the odds necessary for you
to make money consistently.
Second, Im going to talk about stops, and why you should always use
them.
Then, in the next chapter, Im going to talk about indicators and how to
use them with the candlesticks. Afterwards we can go on into the Ichimoku
System, which is made of a set of indicators.
RISK-REWARD
Okay, how do we find the risk-reward ratio and how exactly do we make
decisions based on our analysis?
Well, we first find our support areas, then we find our resistance areas
and then we analyze if the trade makes sense or not.
I would say that you should always assume a probability of the trade
working at around 60%, just to make sure that you get at least a good riskreward ratio whenever getting into a trade
To analyze the risk-reward, you will need to use everything you have
learned so far, in order to create the support and resistance areas.
Lets take a look at 4 examples, before we move on to other matters.
Here, we can see a bearish engulfing pattern that followed a piercing

pattern. As you remember, the high of the bearish engulfing pattern is the
resistance, and the low of the piercing pattern is the support.
As you can see, the risk reward profile in this case looks very good:
When we short it on the bearish engulfing pattern, we have a lot to gain but
very little to lose (just the high of the high wave candle). This would be a very
good trade.
And what about this one?
As I pointed out in the picture, again, the risk-reward profile looks very
good. Look how little we have to lose if we buy the Piercing Pattern. It
confirmed an old support level, and we have a shooting star giving our
resistance levels.
We can clearly see that in between, the market was slightly checkmated
with no real trend whatsoever. Lots of dojis and high wave candles.
This is what you should aim for: very little risk, to a high reward in case
the trade works out.
But what about some examples of trades that do not have a very good
risk-reward profile?
Lets take a look at a couple of examples of that now.
As you can see, the risk-reward profile in this case is not good at all.
Even though we had a very good morning star, take a look at the downside.
And take a look at the reward you are getting.
This is a losing proposition, because even if you make a right call, over
the long-term you will be losing money with these kinds of bets.
Which is why I want you to always remember this concept of riskreward when trading.
Suppose I gave you the worst possible signal available, and after some
thought you realized that the chance of you making money on that trade was
10%. However, imagine that the risk is 1% of your money, while the reward
can be up to 2000%. Would you take it? Of course you would. Because even if
you lost money 1, 2 even 3 times, on the long run you would be making a
killing on that trade.
This is why you should always do risk-reward analysis.
Lets take a look now at another example of a bad trade.
As you can see, we had a couple of high wave candles followed by a

piercing pattern. It would usually be a very good situation to buy right?
But take a look at the risk-reward profile.
It stinks. You are getting pretty much 1-1 odds on the trade. This is
another one of those trades that even though the signals appear to be there,
the risk-reward profile is just not pretty.
If you apply this concept to your trading strategy, whichever it may be,
you will be making a huge, huge progress towards great trading.
This means that most of the candlestick signals should be ignored; it is
wiser to buy a few great trades, than go into a lot of good and bad trades.
This also means that depending on where the market goes next, your
risk-reward profile gets better and better.
I dont want you to see the signal and forget about them if the riskreward profile is not good, I want you to take notes on them and wait for a

better opportunity to buy. You should always be thinking of this concept,
whenever you trade.
Okay, lets take a look now at how to set your stops.
STOPS
You should always use stops. Even though I am sitting in my trading
station all day long, I always set up my stops in the resistance or support areas
before my trade. I always give it a little bit of room too, around 4-10 pips.
But why do I set stops?
I know that most intraday traders want to pull the trigger and exit the
trade themselves. The ideal stop is you, of course. The best traders dont put in
stops, they want to exit the trade at the exact moment they choose to.
But most of us are not capable of that. We get too attached to some
trades, we freeze, and we are prone to psychological mistakes. We cant just
say Im wrong, Im getting out of this trade easily and without attachment.
This is why you should always set your stops, because this way, you are
sure to exit the trade at a point you have specified beforehand. Imagine the
stop as your cars airbag. If you make a mistake, it will be there to help you
out.
Always place your stop (in your mind) before you put in the trade.
Always know where it is before you put in the trade, dont put in the trade and
then think about where the stop is going to be.
The good thing about setting a stop, is also because you can clearly
manage your risk-reward ratio. Before you enter the trade, you must set your
stop to know your risk.
And where do you put the stops? Well, we learned this already. Just use
the support and resistance areas we have already learned about. There is no
mystery to it.
Lets take a look now at the indicators.
65 Lesson 6) Indicators
LESSON 6) INDICATORS
Well, as you have already learned everything you should about the
basics of trading with candlesticks and how to measure your risk reward, it is
time to learn about the indicators that you will be using the most in your life.
First, you have to learn that the more indicators, the better. If you learn
how to use 15 of the right indicators with great aptitude, is better than learn
how to use 2 indicators with the same level of aptitude.
And it is the combination of candles and western techniques that will
bring you to great trading ability.
This will be a very dense chapter, with a lot of examples. Please bear in
mind that I will be as brief as I can, without going on and on about a simple
point. I just want you to understand this quickly, because in next chapter you
will learn exactly how to use the best system around, and we wont use a lot of
this.
CONFLUENCE
This is whenever we have one candlestick line confirming another.
For instance:
As you can see, we had a morning star that was confirmed by a couple of
dojis.
CHANGE OF POLARITY
Change of polarity is a term invented by Steve Nison, and it means that
that the old support turned into the resistance.
For instance:
You can use it to trade as you usually do.
INTERNAL TREND LINE

The Internal Trend Line is one of the most used western trading tools.
You probably know it already. Im not a real fan of it, but just so you know, the
old support becomes the new resistance as well.
Heres how it looks:
I dont use it much, but if you like it you can use it to manage your
resistance and support areas too.
HEAD AND SHOULDERS

The head and shoulders is one of the most used western patterns. And it
is called head and shoulders because, well, it looks exactly like that.
Heres an example:
If the market goes below the neckline, you should sell it. Conversely, we
have the inverted head and shoulders, which works pretty much the same.
Heres how it looks, now without the lines so you can try to see it clearly:
As I said, it looks exactly like the last one except it is inverted. And
remember that now, the position of the neckline is above the pattern.
OSCILLATORS
Oscillators are mathematically derived from the prices, this way, they
are completely objective. This includes Stochastics, MACD, RSI, etc.
When youre trading, you should be using independent information, to
make sure you dont get confused. For instance, you can use MACD, or RSI. But
not both, because they are not giving you any extra information and they
would be just confusing you.
I will talk a lot about RSI in the next chapters, so lets just talk a little bit
about the applications of oscillators.
Essentially, an oscillator is measuring the momentum of the trend. It is
trying to gauge if the market is overbought or oversold.
Im sorry about the size of the pictures in this chapter, however, to show
you everything this is the only way I can do it.
Heres an example of a Piercing Pattern together with the MACD
oscillator:
As you can see, the MACD confirmed what the Piercing Pattern was
telling us: it is confirming that the market is oversold. Is the market
vulnerable? Yes, it appears to be.
Now lets take a look at another candlestick line trade in conjunction
with an oscillator so we can gauge the power of the trade.
As you can see, in the first situation the market appeared to be oversold,
and the piercing pattern worked perfectly. However, on the second trade it
also worked perfectly but the oscillator didnt work that well.
Why?
Well, as you can see, the slight downturn of the market was only two
ticks long, and the oscillator didnt give too much strength to that signal. This
means that the momentum is also measured by the oscillator.
DIVERGENCE
Divergence is whenever the market makes a new low, but the oscillator
doesnt makes a new low. Or, conversely, if the market makes a new high but
the oscillator doesnt show it as a new high. For instance, heres how a
negative divergence would look like:
As you can see from the trading example below, there is a clear
divergence between the oscillator and the price movement. The oscillator
already had turned positive, while the price movement was still making lows.
This is exactly what positive divergence means.
And heres an example of negative divergence:
Also, it is very important for you to use candlesticks in conjunction with

the oscillators. Dont buy by only looking at the oscillator, always look at the
candles in conjunction with it.
Lets take a look at the Bollinger Bands now. It is one of my favorite
indicators to use, and I recommend you learn how to use it. And it is perfectly
fine to use with oscillators.
BOLLINGER BANDS
Bollinger bands, as you probably know, are lines two standard
deviations above and below from the moving average. As the market gets less
volatile, the bands shrink and as it gets more volatile it expands.
It is another way to gauge overbought and oversold, but this is a
separate tool from oscillators, so you can use it in conjunction with them.
They work very well as overbought and oversold indicators, because we know
exactly when the market is getting a little bit overextended. Heres how it
looks, and a simple case study about it:
What is the pattern that happened in the first arrow when the prices
touched the Bollinger Band? A piercing pattern. Look now at the second one, it
is a Bearish Engulfing Pattern. Look at the third one, it is another piercing
pattern.
Even before the arrows, you can see a shooting star crossing the
Bollinger band.
What is going on there?
It is showing us that the market is overextended in all cases. But how do
you trade with it?
Do you need more signals?
NO! You have to think about the Risk-Reward of the trade. Always think
of it even before you think about entering a trade.
FIBONACCI RETRACEMENTS
Another very useful technique used in the markets are the Fibonacci
retracements. It is very simple, it basically plots lines correspondent to 38.2%,
50% and 61.8% from the top price. For instance:
Even though the hammer confirmed the Fibonacci Retracement, I still

wouldnt trade on it. It is too much of a weak signal, and the risk-reward isnt
that good. You can use the Fibonacci Retracements in conjunction with other
indicators, but dont use it alone with candlesticks.
If you do, you will get burned very often.
Now what if we get something like this?
77
Well, that is a little bit different. You can see a variation of an evening
star, with a doji right in the middle of it, and a shooting star confirming the
Retracement.
That is a better trade than the past one, especially because of the doji,
evening star and shooting star variation. And also look at the Risk-Reward
ratio, we have a solid stop right above the Fibonacci Retracement with the
dojis high.
Okay, now that we have learned a lot of ways to see trades in a different
light, lets go to the meat of the course: the Ichimoku System, and why after
learning it you should forget almost everything you have learned up to here.
78 Lesson 7) The Ichimoku System
LESSON 7) THE ICHIMOKU SYSTEM

In this chapter I am going to teach you the intricacies of the most
powerful system ever invented by a trader, the Ichimoku System.
Heres a picture of the system. Just noticed how it timed the market
beautifully.
Right before the market had a huge run, it gave me the signals I needed
in order to make the big bucks.
Can you see how the cloud was beginning to open up, and suddenly the
price slightly touched the cloud?
At the same time, the purple line (the Tenkan-Sen) crossed the blue line
(the Kijun-Sen) signaling even more strength in the market.
Right after the price touched the cloud, if you bought the trade, you
could have made a boatload of money. This is the system Im going to teach

you, and theres a lot more to it. You will use this in conjunction with
everything I have taught you previously, and it will make a difference. This is
the real deal, its almost like cheating the market.
Now, let me explain exactly how the Ichimoku Kinko Hyo works.
It literally translates to Equilibrium chart at a glance. Even though it
may seem slightly chaotic, it is not. Youll learn how to read all the five lines
and the cloud at a glance, by the end of the next chapter.
Just a simple look at the chart will give you the best understanding of
the current trends in the market. Youll learn its strength, its momentum and
the feeling of the trend instantly. I also want you to keep this to yourself,
dont tell all your friends. If you do that, our golden goose is going to get killed.
You have to think about the Ichimoku as a system that tries to show you
whether the market is at equilibrium or not. And if not, youll know exactly
which direction the market is going to. And youll be laughing all the way to
the bank.
There are 5 lines, or components, to the Ichimoku System. Let me teach
you how they are created, so you can understand the mechanics behind the
system. To make money, you have to understand everything you do. And this
is no different. Making money isnt hard, but you have to know what youre
doing.
THE TENKAN-SEN
The Tenkan-Sen is calculated by the following formula:
(Highest High + Lowest Low)/2 for the last 9 periods.
You may think that it is very similar to the moving average. However, it
is the average between the highest high and the lowest low in the window. So
there is a big difference, in that if the market doesnt know where to go, the
Tenkan-Sen will be completely flat for the period. If it is flat, it is because the
price is in a short-term equilibrium. This is why most other traders lose

money, they dont see the equilibrium. They think that the market is always
going somewhere. And trust me, most of the times it is not.
You can see it in this picture:
Look at the Purple line. That is the Tenkan-Sen. It doesnt know where
to go, because neither does the market. It is a lot less reactive than the simple
moving average, so it is a very good conservative line. It represents a better
estimate of the actual price equilibrium. Do you get it?
The good thing about knowing when the market is in equilibrium
is because we dont want to have any false buys or false sell signals when
trading.
If it is flat, we know that in the past 9 days the market is showing no
trend at all.
THE KIJUN-SEN

The Kijun-Sen is calculated using the following formula:
(Highest High + Lowest Low)/2 over the past 26 periods.
Look, it is very similar to the Tenkan-Sen, and it is one of the true hearts
of the Ichimoku Kinko Hyo system. If conservative traders like to use the
moving average, we will use both the Tenkan-Sen and the Kijun-Sen. The
Kijun-Sen provides us with the same information than the Tenkan-Sen, but on
a longer time-frame. Check out the blue line, we can see that it shows the same
behavior as the Tenkan-Sen.
It becomes flat when the market is not doing much, when it is basically
just random-walking without any true trend. Dont do the same mistake that
those broke traders in Wall-Street do all the time: The price may be moving,
but it may be going NOWHERE. Dont try to follow a trend too closely,
sometimes the price will be going nowhere and if you trade, youll lose money.
Lots of it.

Because the Kijun-Sen uses a longer time-frame, it is a very good shortterm indicator of the trend of the market. It is not jumpy and it will tell you
when the market is not reacting. If there is a new highest high, the Kijun-Sen
will spike up, so you can actually follow the trend of the market by following
the trend of the Kijun-Sen. Moreover, if the angle of the Kijun-Sen is getting
steeper, the trend is getting stronger. If the angle gets flatter, the trend is
weakening. You can easily see that here:
Can you see how the Kijun-Sen got very steep? Look at the blue line. It is
usually unreactive, but suddenly it shot up like a rocket.
The Kijun-Sen is a very good indicator of the price equilibrium, even
better than the Tenkan-Sen, because of the longer period. I will explain it to
you later how we may use it to trade, how to find equilibrium points and how
to use it as a stop-loss and as an entry point. And dont trust any other system.
There is another point to the Kijun-Sen. If it becomes flat, it transforms
itself in an attractor to the price. If it stays flat for long enough, the price will

go towards it, no matter what. Its all about the moving average the Kijun-Sen
is calculating.
THE CHIKOU SPAN

The Chikou Span is the current closing price time-shifted backwards
into the past, by 26 periods. The Ichimoku has these unique features that you
will not find in any other charting system. The rationale is pretty simple: we
can quickly compare todays prices with those of 26 periods ago, and by doing
that, we get a better sense of the trend of the market as a whole.
Think of it as your best trading memories. You should always compare
them to your current trading, to make sure youre going in the right direction.
If the current price is lower than the price of 26 periods ago, we know
that the market is bearish. And we can expect, depending on the other factors
of the system, a high probability of the market going even more bearish. We
can easily see the trend with the Chikou Span.

Conversely, if the current price is higher than the price of 26 periods
ago, we know the trend and we know that there is some high probability of
the gaining even more ground.
Even though the trend may seem obvious here, sometimes it wont be
that obvious. So you must use the Chikou Span. It also has other uses, but we
will discuss them later when talking about trading strategies. Youll mostly
use it to confirm your trading calls.
THE ICHIMOKU CLOUD

The Ichimoku Cloud has two parts, both the Senkou Span A and the
Senkou Span B.
This is the foundation to the Ichimoku System. While we could use eachother separately, their real power comes when we can grasp their dynamics in
the Kumo.

We calculate the Senkou Span A by doing the following:
(Tenkan-Sen + Kijun-Sen)/2 time-shifted into the future by 26 periods.
We calculate the Senkou Span B by doing the following:
(Highest High + Lowest Low)/2 for the past 52 periods
time-shifted into the future by 26 periods.
Each of these lines has a powerful meaning. By using the average
between the Tenkan-Sen and the Kijun-Sen time-shifted into the future, the
Senkou Span A can quickly give you the power to see the support and
resistance from 26 periods ago, and compare it with the current spot price.
The Senkou Span B, on the other hand, lets you see the longest-term
equilibrium. So you can quickly make more informed decisions about the
trade.
These two lines are not supposed to be used alone. Always remember,
they are only useful together.
The cloud is the heart of this system, and if you master it, youll be able
to make fortunes trading Forex. And it is easy to learn it too.
CALIBRATION
Like every system, this one has to be calibrated according to the market
you are playing. In a faster market, you would want to cut down the periods.
For instance, in times that the market is experiencing unusual external stress.
While if the market is sleeping like a baby, not seeing a lot of changes,
you should extend the periods in order to profit the most from those longerterm trends.

But the standard, and the settings that I use the most, is the 9 26 52
combo. You should burn these numbers in your mind, because they could
bring you more money than any other three numbers in the world.
88 Lesson 8) How to Use the Ichimoku
LESSON 8) HOW TO USE THE ICHIMOKU

Now is the time to learn how to use the system. And there are several
parts to it. First you have to learn how to use the Kumo.
THE KUMO
One of the Kumos most important aspects is the fact that it can provide
you with the best support and resistance system. If you use still use
trendlines, stop.
Look, Ive tried hundreds of methods to find the correct support and
resistance in Forex, and most of the times, I got burned. Even though the
techniques from the Candlesticks were pretty good, I feel it is my duty to tell
you that this system will almost work like a crystal ball, as soon as you begin
to use it.
Just imagine the inside cloud as the only place you have no idea what is
going to happen, it is too cumbersome to try to figure out exactly how the
price is going to react in the middle of the cloud. But you know one thing: If it
breaks the cloud, it will keep on going. And going. And going. Look in the
picture below how the prices ride the cloud, it is absolutely amazing.
And it just blows the traditional chartists out of the water. Youll be
basically cheating your way out of losing trades. By figuring out in advance
whether the market is breaking the support or the resistance.
Some chartists would lose all this money by not figuring out that the
true support was still below the prices.
I dont even know how some people make money without using the
Ichimoku. It is so simple, yet so powerful, that I find it strange that not a lot of
traders use it. Ive made a killing with it.
Another problem that usually makes traditional chartists lose a
boatload of money is when the price is in the middle of the cloud and, because
they cant see it, they go long thinking that the resistance has been broken. But
it hasnt, the price is in the middle of the cloud and it is too risky to go long or
short in this situation.
Just check out the following picture and youll clearly see what I mean,
the traditional chartist would have gone short on the trade, however, he
would have lost everything pretty quickly. He didnt realize that the price
trend was not yet defined. The price touched the Senkou Span B and reacted
faster than any chartist could see.
This is the power of this system. And we are just getting started.
But what about the relationship between the price and the Kumo? Well,
if you havent realized until now: if the price is trading above the Kumo, what
we are seeing is a bull signal, because obviously, the current price is higher
than the historical average.
In the same way, when the price is trading below the Kumo we are in a
bear market. The first step in analyzing any trading situation is to see the
relationship between the price and the Kumo. When you do that, youll have
the necessary market trend information. Something that can be hidden with
other methods. Heres an example of a bear market:
Dont trade unless your trade agrees with the Price-Kumo relationship.
Dont go long if the relationship is bearish. You may make 2 pips, but youll
lose 50. Just go short and ride the trend. It is always better to ride the trend,
than to try to time the market perfectly.
Another very important factor you must take in consideration is the
Kumos depth. It can vary immensely, and you have to know exactly what it
means. If the market is too volatile, the Kumo will open up; conversely, if the
market is not volatile at all, the Kumo will close up.
But why is that?
Remember what the Senkou Span A and the Senkou Span B represent?
The Senkou Span A represents the average between the Tenkan-Sen and the
Kijun-Sen. But the periods for the Tenkan-Sen and the Kijun-Sen are different,
they are respectively 9 and 26 periods. So when you average it, you are
finding the middle point between the longer average and the shorter average.
While the Senkou Span B represents the average of the highest high and the

lowest low for the past 52 periods. When you take the difference between
both, you are basically measuring the local volatility against the longer term
volatility.
So the Kumo will expand and contract based on the volatility of the
market. And what does that mean to you? Well, if the Kumo is very thick, and
youre long in a position that is breaking through the resistance, you should go
long as soon as it breaks through the Kumo. Whenever the price breaks
through a thick Kumo, it will gain momentum very quickly and rapidly. For
instance, here we can see both a very strong short and a very strong buy
signal:
In the first situation, the price broke through a thick Kumo and tried to
beat the new resistance. But because the Kumo is too thick, it didnt have the
strength to break through. If you had shorted the trade as soon as the price
came below the Kumo, you would have made a killing. Why would you short
it? Because you know that the Kumo is very strong, and it would be very hard
for it to come back up.

Similarly, on the second moment, the price stayed with the Senkou Span
B for a couple of seconds as it tried to break the resistance. As soon as it did,
the market had a huge run-up. It is that simple to make money by trading the
Kumo. And we are just beginning.
As you can see, the Kumo also has a sentiment. It has a natural bias,
sometimes bullish, sometimes bearish. It has a bullish sentiment when the
Senkou Span A is above the Senkou Span B. And conversely, it has a bearish
sentiment when the Senkou Span A is below the Senkou Span B.
Why is that? Well, in the first case, the faster average is trading above
the longer-term average. And in the second, the opposite is happening. It is
that simple.
Heres an example of a bearish Kumo:
And heres an example of a bullish Kumo:
Dont trade on the Kumos sentiment alone. It is not a good strategy and
youll lose money if you do it. The Kumos sentiment is just another piece of
the puzzle. You should use it only as confirmation, not as the primary driver
for your trades.
There is another aspect of the Kumo that you have to understand in
order to grasp the magnitude of the effectiveness of the Ichimoku. Youll often
see flat tops or flat bottoms on the Kumo.
If you see a flat Senkou Span B, you have to think of it as having the
same effect as the flat Kijun-Sen. It is an attractor to the price that is in its
close proximity. Why? Because the Senkou Span B is the price-equilibrium for
the past 52 periods. The price will always want to go there, if the equilibrium
remains for long enough.
In a bullish trend, the flat Senkou Span B will result in a flat bottom
Kumo, while in a bearish trend it will result in a flat top Kumo.

Beware of the pull of the Senkou Span B on the prices, most likely the
prices will ride the flat bottom or top, so you must choose the entry or exit
point carefully.
Here you can see an example of what can happen if you dont respect
the flat Kumo, you can go short at the exact wrong moment and lose your
money fast. Remember that even though the price has crossed the cloud,
because the Kumo has a flat bottom it still exerts a lot of pressure and pull
over the price.
THE MOST IMPORTANT TRADING STRATEGY!

Now lets get to the meat of this course. Ill give you all the best trading
strategy for this system. The other ones Ill give you in the next chapter as
reliable, but are not as reliable as this strategy. This is the most traditional
strategy within the Ichimoku framework, and all serious practitioners should
completely understand it.

If the Tenkan-Sen crosses above the Kijun-Sen, we have a bullish signal.
If the Tenkan-Sen crosses below the Kijun-Sen, we have a bearish signal. The
strength of the signal depends on the the relationship between the price and
the Kumo.
Heres how it works:
Strength Bullish Cross
Strong Cross Above
Kumo
Neutral Cross Inside
Kumo
Weak
Cross Below
Kumo
Chikou Above Cross
Span
Means Stronger
Signal
Bearish Cross
Cross Below
Kumo
Cross Inside
Kumo
Cross Above
Kumo
Below Cross
Means Stronger
Signal

As you can see, in the point A we have a Neutral Bullish Signal, and in
point B we have a weak Bearish Signal. Now you have to check the
relationship between the cross and the Chikou Span. It is that simple.
What is the point of entry? This is pretty easy to see: an order is placed
when the cross has been solidified. Just be careful of any resistance near the
cross. And remember that if the cross is solidified while the price is leaving
the Kumo, there is a high probability of a strong movement.
What is the exit point? There are several different exit points, however,
the easiest exit point you can take is whenever there is a reverse-cross. Just
remember that your own money-management skills will be the primary
driver of the exit point. If you want to exit as soon as you make 85 pips, do it. If
you want to take a little bit of volatility and ride the trend, do it. Follow your
usual strategies when exiting. Similarly, there is no stop-loss strategy.
Take the profits when you have reached either your personal goals, or
the cross has reversed itself. Dont try to over-ride the trend, it will come back
to bite you in the ass if you do.
For instance, heres a simple trade that could have made you 117 pips in
a day, easily.
And all I had to do was to buy when I saw the cross, and sell when I saw
another cross. No big deal. The price was above the Kumo, giving me even
stronger bullish signals.
101 Lesson 9) The Advanced Trading Strategies
LESSON 9) THE ADVANCED TRADING STRATEGIES

Lets take a look now at our advanced trading strategies.
THE RELATIVE TENKAN/KIJUN CROSS

Lets get it started then. This first strategy is very similar to the
Tenkan/Kijun Cross, however, now I will teach you the secret exit strategy
that is at the heart of all the advanced strategies I am going to teach you. You
have to learn not only when to buy, but more importantly, when to get out.
As with the Tenkan/Kijun Cross, as the Tenkan crosses above the Kijun
you should go long. And if it crosses below the Kijun, you should go short. The
strength of the signal depends, again, on the relationship between the cross
and the Kumo. This will be true for all our strategies.
However, the heart of this new advanced trade is the exit strategy. We
are going to use a popular oscillator to give us the exit strategy: The Relative
Strength Index.
I know, it may sound old and boring. Thats what I thought, too, when
my mentor taught me this secret for the first time.
I was wrong. So very wrong.
Sometimes, old is good. And in this case, Ill show you exactly why the
Relative Strength Index will give you the best exit strategies.
Look at the following bullish example, and Ill explain what I did there.
The entry point is when the Tenkan-Sen crosses the Kijun-Sen right?
Entry Point: At Point A, the cross had a weak bullish signal. However,
because the depth of the Kumo is very thin, I went ahead and bought the
trade.
Exit point: At point B our exit strategy was triggered. Now heres what I
have to explain to you; this is our bullish exit strategy:
1
Whenever the RSI falls 10% or more.
If the RSI falls down less than 10% and when it runs up it doesnt break
the peak-resistance.

This is exactly what I did there. The RSI fell a little bit, and then gained
back again but didnt have the strength to break through the peak. That is my
signal to sell. It showed weakness, and we never like weakness in a bull
market.
My next entry point was the other cross, on point C. However, this time
we were very confident: it was a strong bull signal above the bullish Kumo.
That is a very easy trade. Again, I used the exit strategy on point D, and didnt
lose a single pip.
This is gold. I will give you 3 more examples so we can get this
engrained in your mind.
Lets take a look at another bullish example:

Again, as you can see, the strategy works like a charm. This may be the
easiest way to make money with the Ichimoku.
You bought it at point A, as you saw that very strong bullish signal with
a bullish Kumo. After we reached point B, our exit strategy was triggered and
we exited perfectly.
My Mentor once said to me that if he could choose only one trade, he
would choose the Relative Tenkan/Kijun Cross: it is easy to apply and
extremely reliable.
For those on the outside, it looks like you have a crystal ball. Now lets
look at bearish examples.
The entry point: The Tenkan crosses the Kijun down.
What about the bearish exit signals? Heres the strategy for the bearish
Relative Tenkan/Kijun Cross:
1
Whenever the RSI gains 25% or more.
If the RSI gains less than 25% and when it goes down it doesnt break the
inverted-peak resistance.
Lets see an example:
We got in fast and left the trade even faster. This trade alone is worth a
fortune, and it only took us a little bit less than 5 hours to go in and out of it.
As you can see, at point A we had our very strong bearish signal, and it
was below a bearish Kumo. At point B, our exit point was triggered and we
didnt lose a single penny. The perfect kill.
Now Ill show you another example of a very strong bear signal, below
the bearish Kumo:
As you can see with this trade, our strategy worked perfectly again. And
we managed to make 437 pips in less than 7 hours.
This is what I call the perfect storm: a bearish Kumo, triggering a
bearish cross and the thickening of the Kumo right after the trade started.
That looks perfect to me. I hope that by now you can catch all these little
details. Lets take a look at the next strategy now.
THE KUMO BREAKOUT

The Kumo Breakout is one of the most reliable strategies in our system.
The exit strategy is exactly the same as the exit strategy for The Relative
Tenkan/Kijun Cross.

What do I mean by Kumo Breakout? Well, as soon as the price breaks
through the Kumo, you enter the market in the direction of the break.
You just have to be careful about one thing: if the Kumo has a flat top or
bottom, you have to respect it and think twice before trading. Also remember
to think about the Kumos Sentiment. If the sentiment is bearish, and the trade
is bearish, it is a very good sign. Conversely, if the sentiment is bullish and the
trade is bullish, a good trade may be developing.
Heres an example of a Bullish Kumo Breakout:
Lets see everything that makes this a good trade:

1. Bullish Kumo
2. Near a Very Steep Tenkan/Kijun Cross

3. No Flat Top
4. The Chikou Span is Crossing Up
5. The Relative Strength Index is Bullish
This trade can be as easy as running through a check-list, and yet, you
have just made 1042 pips. Easily and quickly.
Now lets take a look at a bearish example:
This is a very weak bear Kumo Breakout. Even though we managed to

make 59 pips, I wouldnt have taken this trade if the Tenkan/Kijun Cross
hadnt just happened. This added strength to my belief that it was a good
trade.
THE KIJUN-SEN CROSS

The Kijun Sen Cross is probably the most popular trade in the Ichimoku
System, and it is one of the most reliable trades too. It happens when the price
crosses over the Kijun-Sen.
If the price crosses from the top down, it is a bearish cross. If the price
crosses from the bottom up, it is a bullish signal.
As with all Crosses in the Ichimoku System, its relationship to the Kumo
is essential to the classification of the strength of the strategy.
The classification is exactly the same as with the Tenkan/Kijun Cross.
Heres a table, so you can refresh your memory:
Strength Bullish Cross
Strong Cross Above
Kumo
Neutral Cross Inside
Kumo
Weak
Cross Below
Kumo
Bearish Cross
Cross Below
Kumo
Cross Inside
Kumo
Cross Above
Kumo
Lets see a couple of examples so we can get the hang of it. I will also tell
you why some of the weak trades work, and why some of the good trades
dont work. Get ready to go deep into the Ichimoku.
Heres an example of a strong bullish Kijun-Sen Cross:
Can you see the Kijun-Sen Cross? We made a lot of money in a single
trade that lasted slightly less than 40 minutes.
The Kijun-Sen here has a very good shape. As you can see, the Relative
Strength Index was already pointing out to us that it was going to be a very
good run.
As soon as the prices broke through the flat Kijun-Sen, we had our trade
ready. It is that easy. Our exit point was calculated as usual, with the Relative
Strength Index.
Now lets look at another example:
This is a weak Kijun-Sen Cross trade. Even though we manage to make

24 pips in 40 minutes, it was riskier than usual.
I only entered this trade because the RSI showed me a lot of strength.
Weak crosses need other types of confirmation from outside the
Ichimoku System.
Lets take a look at a Bearish example now:
Heres what I call a weak bear Kijun-Sen Cross. What are the reasons
that made me enter the trade?
Look at the sky falling RSI. Look at the trend in the Tenkan-Sen.
However, sometimes I would pass on trades like these.
I really dont like weak crosses unless I have some good reasons to enter
the trade.
Lets take a look at another Bear example, but a very strong bear
example:
The difference between the last weak bear cross, and this strong cross is
remarkable. At the same time as the prices were crossing through the KijunSen, a Tenkan/Kijun Bearish cross happened, and the prices broke through a
Kumo. The RSI was falling like a kamikaze.
This is a perfect storm.
Whenever you have the opportunity to take a trade like this, do it. The
probability of losing money is greatly reduced.
Lets go back to a bullish example.
I am mixing the examples up, because I hope that by changing the
example type all the time you will learn how to trade the Ichimoku in every
situation possible.
Can you see the strong cross? Easy money. The Kijun-Sen was already
trending upwards, and as the price broke through, I saw this huge spike in the
RSI and I knew that this trade would make me money.
Always look for other indications that the trade will work. In this case, it
was the RSI spike and the Kumo-Cross that had happened just a tick before
the actual trade.
Again, I used our standard exit strategy.
Lets take a look at a weak bullish example now:
Well, as you probably can see now, I only entered the trade because the
RSI was showing me the strength I needed to make a couple of pips, fast. Even
though the Bullish Tenkan/Kijun Cross happened before my exit point, I dont
like to break my own exit rules.
As a guideline, you should never stay longer or go out earlier than your
exit strategy dictates. It will make you lose money in the long run, I guarantee
it.
Lets take a look at a couple of perfect storms now, so you will never
miss one of these. I will use examples I have used before, and comment on
every factor that influenced my decision to take the trade.
Look at this beauty. What a great day. What do we have going on for us?
A) A Tenkan/Kijun Strong Bullish Cross
B) A Kijun-Sen Strong Bullish Cross
C) A Bullish Kumo Sentiment
D) A Spiking RSI
Whenever you take trades like these, you can rest assured that you will
make money. All youll need to do is to ride the trend, and that is it. With the
Ichimoku, you will not have to trade 20 times every minute.
You can take a break, get some tea and go back to work. It wont affect
your profits that much, compared to other systems.

Lets take a look at a bearish perfect storm now:
Before you read my checklist, try to see everything that matters, and try
to think for yourself why this is a great trade.
Go on, dont be scared Ill help you out in a bit.
Got it? Alright, heres everything I see in the trade, and I hope you will
see that too:
A) A Tenkan/Kijun Strong Bearish Cross
B) A Kijun-Sen Strong Bearish Cross
C) A Bearish Kumo
D) A Bearish RSI Trend

Can you see how easy this trade is? I can teach this to a 7-year-old and
he will make more money than most traders out there.
And Im not even kidding.
What about some examples where the Kijun-Sen Cross didnt work? Just
as important it is to make money, it is to not lose money.
There you go, an example (it was very hard to find one by the way)
where the Kijun-Sen Cross did not work. Neither did the Tenkan/Kijun Cross
Right after the Kijun-Sen Cross. If you took that trade, you would lose 16 pips
until the exit strategy worked.
Why is that? Well, for starters, the Kumo Sentiment was turning Bullish
right with the trade. Secondly, look at the trend of the Kijun-Sen. You were
trading against the trend of a long term average. Thirdly, you were trading
against the Bullish Tenkan/Kijun Strong Cross. Even if the cross was reversing
itself, you would not know at that time.

Can you see how many factors make this trade a very bad one? The
Ichimoku is a very unique system, and just one line should never tell you what
to do. Look at the whole.
Lets look now at a Bullish Kijun-Sen Cross that didnt work:
Okay, you just lost 31 pips in less than 25 minutes. Why was that?
There are several factors that are giving you a good signal for the trade.
Firstly, there was a Bullish Kumo Breakout. Secondly, the RSI was trending up.
Thirdly, there was a strong bullish Kijun-Sen Cross.
So why didnt it work?
The Kumo Breakout was not strong enough, can you see the bearish
sentiment of the Kumo? Can you also see that the top of the Kumo was flat,
went down a step and continued flat?

Secondly, you didnt wait for the Kijun-Sen Cross to solidify. If you had
waited just a tick more, you would see that the Tenkan/Kijun Cross Bearish
was going to happen and you would be out of the trade as quickly as you
could.
Thirdly, the Kijun-Sen was flat. Remember how the Flat Kijun-Sen is an
attractor for prices, like a magnet? That is exactly what happened there when
you had that bullish signal.
The market was going sideways, and you wanted to trade, this is why
you lost 31 pips in 25 minutes.
I think I have covered the most important strategies in the Ichimoku
System.
Lets now take a look at how to deal with money management, as we
conclude our studies about the Ichimoku System.
121 Lesson 10) Money-Management and the Kelly Criterion
LESSON 10) MONEY-MANAGEMENT AND THE KELLY

CRITERION
You have probably heard about the Kelly Criterion by now. I will try to
give you a quick lesson about it, in order to teach you how you should
implement it when using our system.
This Criterion was developed by John Kelly and implemented in
gambling and investing by Edward Thorp.
The Kelly Criterion is the strategy that will maximize your wealth over
the long term. It beats any other money-management system, and this is why
we are going to use it.
Did you hear the stories about the MIT Blackjack team beating the
casinos and making millions of dollars?
They were using the Kelly Criterion in order to optimize their betting
size and guarantee that their bankroll was growing as fast as possible.
And if its good enough for those MIT graduates, it is good enough for us.
The only problem with the Kelly Criterion is that the volatility of your
total bankroll will not be minimized.
Unlike Markovitzs theory on minimizing risk while maximizing returns,
the Kelly Criterion only tries to maximize your return.
Some prominent economists have written peer-reviewed articles
arguing against the Kelly Criterion, because they think that Markovitzs
approach to portfolio management is the optimum one.
I say that they should all go back to their caves, while we make the
money. And I can talk bad about them, because I am an economic enthusiast
myself, albeit a renegade.

They are always arguing about the stupidest things youve ever heard. I
wont bog you down with the details, but let me tell you that most of the things
that economists study, have no correlation with the real world of money
making.
Some claims have been made that even Warren Buffett and Bill Gross
use the Kelly Criterion money management system. That is enough to tell me
that this system is very good.
If the richest man in the world uses it, it cant be as bad as those
economists say it is.
It will not minimize the volatility of your portfolio; in fact the volatility
will be quite big.
What the Kelly Criterion will tell you is how to choose the optimum bet
size against a set of probabilities and returns.
For instance, it will tell you exactly how much you should bet if your
chances of winning are 51% and your payoff is 2-to-1 in order to maximize
your long-term return.
And one good thing about the Kelly Criterion is that it will never let you
go bankrupt. That is because the bet size is scalable; it will always be a
fraction of your bankroll and not a fixed amount of money.
This way, if you lose money the Kelly Criterion will tell you t0 decrease
your bet size as you no longer have the opportunity to invest what you used
to.
It is a very good money management system because of this, as it will
prevent you from going crazy and betting more than you should in a single
trade.
However, you must be aware that if you use the full power of the Kelly
Criterion system, your bankroll will probably suffer huge losses and equally
huge wins. The volatility might be huge.

This is why the Kelly Criterion is supposed to be a long-term money
management system. Rather than blowing all your money away in a single
trade, deposit more money in your account, and blow it all again, the system
assumes that you keep track of your bankroll over time, and that you adjust
your bet sizes accordingly.
Another problem with the Kelly Criterion is that, having to do the math
all the time, in order to figure out the exact fraction of your bankroll you
should invest might scare you.
This is why I did all the math for you.
In the last page of this chapter, you will find a table with both the
Ichimoku System signals, and how much you should invest in the trade.
This way, you dont need to pull your calculator all the time. You can just
take a look at the table and youll quickly know exactly the fraction of your
bankroll you should invest.
You should understand the Ichimoku System if you want to use my
money management system, because you will be constantly checking for the
signals necessary for you to choose the optimum bet size.
Before we start, I just wanted to tell you that money management alone
will not bring you incredible results, but it will help you maximize your gains
and minimize your losses.
So your first goal is to understand exactly how to make the most amount
of money by using the Ichimoku System, not how to use the Kelly Criterion.
After you have mastered the Ichimoku, then you can focus on the money
management aspect of trading.
Okay, lets begin.
I know that you might not be very familiar with math; however, I feel
that you should know at least the basics of the mathematics of the Kelly
Criterion in order to know what youre doing with your money.

The Kelly bet, or the fraction you should invest into each trade is given
by
Where f* is the fraction of your bankroll, b is the payoff odds youre

receiving, p is the probability of winning and q is the probability of losing (1p). E is how confident we are in our trading abilities (a modification I made).
What is that formula telling us? I dont care, and neither should you. It
wont add to your money making skills. That formula is a tool, and should be
used as the tool it is.
As of today, I would advise you into using E=0.3 for now and as you get
better, you can increase it. Use at most an E=0.8, it will be safer for your
bankroll this way.
Okay, how about some real numbers now?
To use the Kelly Criterion, we have to estimate the winning percentage
of the strategy we are utilizing, and our odds.
I will use standard odds of 2 to 1, because it is safe enough and I believe
that on most cases, this is how much you would get, double of what you are
risking, especially on Forex Trading. If you want to change this, you can. Just
use the spreadsheet I gave you to change the odds.
Now, what about the specific strategies? How much should you invest in
each of the Ichimoku Strategies?
I will create a small table, so you can find out the probability of winning
with our system (this is all estimated from past trades and my experience).
You will find on the table the following:
Number of signals The number of signals that the Ichimoku System is
giving you. For instance, if you see both a Tenkan/Kijun Cross and a
Kijun-Sen Cross, that would be two signals.

But there are a couple of subtleties in the system, so I have created
another table so you can calculate the number of signals easily.
Probability of Winning This is the probability of you entering a
winning trade. It obviously depends on the number of signals, and it is
in direct relationship with them.
Probability of Losing This is the probability of you entering a losing
trade. It can be seen as the complement of the Probability of Winning.
And it is in inverse relationship with the number of signals youre
getting.
Number of Signals
1
2
3
4
5
Probability of Winning Probability of Losing

48%
52%
57%
43%
62%
38%
69%
31%
76%
24%
I am making your life as easy as it is humanly possible. Okay, now that

we have the probabilities we should use with the Kelly Criterion, how about
the number of signals?
Well, I have created this kind of system in order to make your life as
simple as possible.
When I say the number of signals, I mean the number of trading signals
you are receiving from the Ichimoku in a given trade.

Heres a way to think about it: Suppose in the same trade, you had both
a bullish Kijun-Sen Cross and a bullish Tenkan/Sen Cross. How many signals
are you getting?
Two signals, of course.
It is that simple. I have also separated the number of signals by the kind
of cross that is happening.
For instance, if you have a bullish Kumo sentiment, a strong bullish
Kijun-Sen Cross and a strong Tenkan/Kijun Cross, how many signals are
there?
Only three? Wrong!
There are in total five signals. You forgot to count both strong factors
that add up to the trade.
I have also created a table for the number of signals, so you can easily
see how many signals you are getting in every trade you enter.
Strategy
Relative Tenkan/Kijun Cross
Kijun-Sen Cross
Kumo Breakout
Bull(Bear) Strategy + Bullish(Bearish) Sentiment
Two Bull(Bear) Strategies + Bullish(Bearish)
Sentiment
Two Strategies + Different Sentiment
Weak
1
1
1
2
3
Neutral
1
1
1
3
4
Strong
2
2
1
4
5
Now you just have to plug in the numbers. I made all this Kelly Criterion
money management strategy as easy as I could for you.
What most people would tell you is to simply find out what is the
statistics of your winning percentage and go from there.
But that would send the wrong message: the message that every trade
you get in has the same probability of success.

We know that this isnt true.
So I created this complete personalized system, and it can only be found
in this course.
Lets see an example now:
By using our table, we can see that we have two strategies at work on
the weak side, but the sentiment of the Kumo is inverted. So we only have 2
signals. By checking our Probability Table, we have a 55% chance of making
money here.
Using the Kelly Criterion, we have that the fraction of our bankroll that
we should invest is 9.75% of our bankroll. But how would that translate in
terms of Forex trading?

Well, you should invest up until your margin is 9.75% of your bankroll.
So that in case you lose, you can only lose 9.75% of your bankroll.
Its easy right? The Kelly Criterion is very useful, and will help you
increase your bankroll quickly and easily. You might get some volatility, but
you will also get the best exponential growth rate on your money.
I know, this was a quick chapter, but I have given you a complete system
for money management. It may seem simple, but the mathematics behind it is
very complex. I could talk about this for ages with you, but Id rather give
something you can use today.
129 Conclusion
CONCLUSION
I hope you utilize all the techniques I have taught you as you progress
into becoming a true Ichimoku Trader.
If you want to know exactly what will make you the most money in the
long run, here is a small list:
The Relative Tenkan/Kijun Cross coupled with Candlestick Patterns
Risk-Reward Analysis
Money Management
That is it.
That is all you need to know in order to make a lot of money with this
system. Now go trade.
CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN
ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE
TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF
ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL
ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO
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CONTRACTS CAN BE SIGNIFICANT. YOU SHOULD THEREFORE CAREFULLY CONSIDER WHETHER SUCH TRADING IS
SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION SINCE ALL SPECULATIVE TRADING IS INHERENTLY
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DECIDE YOUR OWN SUITABILITY TO TRADE OR NOT. FOREX RESULTS CAN NEVER BE GUARANTEED. THIS IS NOT AN
OFFER TO BUY OR SELL FOREX CONTRACTS.

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CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS.

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5 Lesson 1) Introduction to the Candlesticks Chart

LESSON 1) INTRODUCTION TO THE CANDLESTICKS

6 Lesson 1) Introduction to the Candlesticks Chart

7 Lesson 1) Introduction to the Candlesticks Chart

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8 Lesson 1) Introduction to the Candlesticks Chart

CONSTRUCTION OF THE CANDLE LINE

The candlestick line is made of four data points:

9 Lesson 1) Introduction to the Candlesticks Chart

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10 Lesson 2) The Individual Candles

LESSON 2) THE INDIVIDUAL CANDLES

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11 Lesson 2) The Individual Candles

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12 Lesson 2) The Individual Candles

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13 Lesson 2) The Individual Candles

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14 Lesson 2) The Individual Candles

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15 Lesson 2) The Individual Candles

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16 Lesson 2) The Individual Candles

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17 Lesson 2) The Individual Candles

In this instance, what we see is that even though in both situations a

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18 Lesson 2) The Individual Candles

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19 Lesson 2) The Individual Candles

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20 Lesson 2) The Individual Candles

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21 Lesson 2) The Individual Candles

22 Lesson 2) The Individual Candles

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23 Lesson 2) The Individual Candles

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24 Lesson 2) The Individual Candles

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25 Lesson 2) The Individual Candles

The Hammer is a one-sided shadow, and the hammer is a very long

26 Lesson 2) The Individual Candles

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27 Lesson 2) The Individual Candles

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28 Lesson 2) The Individual Candles

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29 Lesson 2) The Individual Candles

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30 Lesson 3) Two Candles Patterns

LESSON 3) TWO CANDLES PATTERNS

THE CHECKMATE PRINCIPLE

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31 Lesson 3) Two Candles Patterns

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32 Lesson 3) Two Candles Patterns

THE BULLISH ENGULFING PATTERN

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