Trade Like A Pro With Japanese Candlesticks Ebook

TRADE LIKE A PRO
WITH JAPANESE
CANDLESTICKS
HOW TO TRADE WITH
CONFIDENCE AND SUCCESSFULLY
USING 300-YEAR-OLD TESTED
METHOD
Copyright 2014 by Luca Moschini. All rights reserved.

Charts by TC2000 and Worden Brothers, Inc. have been used with permission.
Copyright 1997-2015 TC2000 and Worden Brothers, Inc. All rights reserved.
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TRADING RISK DISCLAIMER

All the information shared in this course is provided for educational purposes
only. Any trades placed upon reliance of SharperTrades.com are taken at your own risk
for your own account. Past performance is no guarantee. While there is great potential
for reward trading stocks, commodities, options and forex, there is also substantial risk
of loss. All trading operations involve high risks of losing your entire investment. You
must therefore decide your own suitability to trade. Trading results can never be
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voice messages, and any other associated messages/media (hereinafter collectively
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only. The Information should not be construed as investment / trading advice and is not
meant to be a solicitation or recommendation to buy, sell, or hold any securities
mentioned.

TABLE OF CONTENTS
TRADING RISK DISCLAIMER
INTRODUCTION TO JAPANESE CANDLESTICKS
SUPPLY AND DEMAND: THE DRIVING FORCE OF THE MARKET
EMOTIONS: THE HIDDEN INGREDIENT
KNOW YOUR TRADING STYLE
Technical Trading and Fundamental Trading
Day Trading
Swing Trading
Investing
What Type of Trader Are You?
LINE CHARTS, BAR CHARTS AND CANDLESTICK CHARTS
Line Chart
Bar Chart
Candlestick Chart
Benefits of Candlestick Charts
INVESTING
THREE MARKET DIRECTIONS
Uptrend
List of Long (Bullish) ETFs
Downtrend
List of Inverse (Bearish) ETFs
Sideways Market
INTRODUCTION TO REVERSAL PATTERNS
What Is a Reversal Pattern?
TEN PRIMARY CANDLESTICK REVERSAL PATTERNS
CANDLESTICK CHART
Benefits of Candlestick Charts
DOJI PATTERNS
Pattern No. 1 Doji Star
Doji Variation 1.1 Spinning Top
Doji Variation 1.2 Gravestone Doji
Doji Variation 1.3 Dragonfly Doji
HAMMER PATTERNS
Pattern No. 2 - Hammer
Hammer Variation 1.1 Hanging Man
Hammer Variation 1.2 Inverted Hammer
ENGULFING PATTERNS
Pattern No. 3 Engulfing
Bullish Engulfing
Bearish Engulfing
HARAMI PATTERNS
Pattern No. 4 - Harami
Bullish Harami
Bearish Harami
KICKER PATTERNS
Pattern No. 5 - Kicker
Bullish Kicker
Bearish Kicker
PIERCING PATTERNS
Pattern No. 6 Piercing Line
Pattern No. 7 Dark Cloud
STAR PATTERNS
Pattern No. 8 Morning Star
Pattern No. 9 Evening Star
Pattern No. 10 Shooting Star
CONCLUSION
INTRODUCTION TO JAPANESE CANDLESTICKS

This eBook is a compilation of online lessons developed over the course of the years
designed to teach individuals visual methods of recognizing, identifying and eventually
trading in the market place with success and confidence, using 300-year-old tested
methods. The visual methods that we will be focusing on in this eBook are known as
Japanese candlesticks.
Japanese candlesticks have been used by Japanese rice traders since the 1700s. The
father of Japanese candlesticks, Munehisa Homma, a rice trader from Sakata (Japan),
developed this method of reading charts that was unique and incredibly successful.
It was so successful that made Homma and those who followed his method, legendarily
wealthy. In the 1800s the system was further refined and improved. Three hundred
years later, candlestick charts are still used by traders and investors around the world.
What are Japanese candlesticks? Japanese candlesticks are the visual illustration of
the collective knowledge and decision making of all investors during a specific interval of
time. They show us the full picture of all information reflected in the movement of price
action as it is developing now.
What makes this method so unique and so successful? Candlesticks dont tell us why
price is moving (news releases, earnings reports, etc.,). What they tell us is something
much more valuable, which is what is happening in the investors sentiment of emotions
and decision-making, which drives the price move.
Candlesticks reveal a unique type of information that no other indicator does: human
emotions. Think of the candlesticks as market psychology indicators.
How well a company is doing in the market place, has little to do with how well an
investor can make money in the market. In fact price action is mainly the result of how
well a company is perceived to be performing, versus what the real value of the
company is.
Investors emotions are a huge factor in their decision making process. The emotions of
fear and greed especially, are major contributors that cause investors to panic then sell
at the bottom or be exuberant and buy at the top.
Candlestick charts give the visual illustration of the decision making process of major
market players and highlights the emotions influencing their decisions. The visual
illustration provided by candlestick charts give candlestick traders the ability to see when
the overall market sentiment is changing and to quickly act upon that change.
By recognizing candlestick signals and reversal patterns, candlestick traders can
position themselves on the right side of a trend and profit from a price action influenced
by a news report released five or seven days later.
Knowledge of candlestick analysis combined with technical analysis (support,
resistance, trend channels, moving averages) give candlestick traders the ability to
identify the current market trend, recognize a change in market direction and place
trades with greater confidence and greater results.
Also the visual illustration allows candlestick traders to recognize trades that are not
working and to get out of them with minor or no losses, before suffering greater losses.
Candlestick analysis can be used to trade any kind of trading security (stocks, options,
commodities, bonds, currencies) for both long-term investments (six months, one year,
five years) as well as short-term investments (one month, one week, one day).
Moreover, candlestick analysis will help candlestick traders and investors to trade and
benefit from uptrend markets, known as bullish markets, as well as downtrend markets,
known as bearish markets.
Japanese candlesticks today, are gaining popularity despite the general assumption that
candlesticks were at one time considered unreliable, complicated and cumbersome.
The reason for their increase in popularity, is that more educational material about
Japanese candlesticks has became available, debunking the issues mentioned. In fact,
the trading method of Japanese candlesticks is very simple, extremely reliable and
highly effective. It is not a mistake that 300 years later traders around the world are still
looking at candlestick charts.
There are over 150 candlestick signals and patterns, comprised of primary reversal
patterns, secondary reversal patterns, continuation patterns, high performing patterns,
etc. This can truly be overwhelming and confusing to anyone interested in learning
candlestick analysis (the studies of Japanese candlesticks). Even the most experienced
trader can find it confusing.
However, more than two thirds of the 150 Japanese candlesticks appear rarely, which
means that they are not essential to our learning. That narrows our reach to just over 40
candlestick patterns.
The remaining one third (40) have been divided into patterns in the following categories:
-
10 Primary Reversal Patterns

10 Secondary Reversal Patterns
10 Continuation Patterns
10 High Performing Patterns
Candlestick analysis is just like learning a language; in order to understand their meaning
we have to know, speak and practice their language. This eBook will teach this, with a main
focus on the ten primary reversal patterns.
Before we dive into the reversal patterns, lets see what influences stock price action,
what styles of trading strategies people are utilizing in todays market and the types of
market conditions we are going trade in.
TAKE ACTION
If you are interested in diving deeper into candlestick trading, enroll in one of our online
courses. Get serious about your money management and your personal investments by
visiting www.sharpertrades.com.
SUPPLY AND DEMAND: THE DRIVING FORCE OF THE

MARKET
What makes the price of stocks or any other trading security go up and down? Debt,
balance sheets, corporate profiles, company earnings, job reports, oil prices, bonds and
commodities? No. The answer is simple: supply and demand. Anything else is the
effect of supply and demand, the desire of buying or selling.
Supply and demand are the foundation of market economy. Supply is the quantity of
stock (or trading securities) offered in the market place and represents the sellers.
Demand is the quantity of a stock (or trading securities) and represents the buyers.
When the price of a stock (or any other trading security) drops to a certain level ($2 in
our example) it becomes attractive to the buyers. More buying means more demand,
which causes the prices to soar up. As long as the supply can meet the demand, the
price will keep going higher. When prices go up due to an increase in demand (more
buyers), or decrease of supply (not enough sellers) the market is in an uptrend. This
type of market is called bullish market, or bull market. During an uptrend, the bulls (the
buyers) are in control.
When a stock or any other trading security reaches a certain level ($11 in our example) it
becomes less attractive to the buyers. There is now a reverse situation where those that
bought those stocks at $2, $5, $7 (or more) need to sell them. The buyers become
sellers, meaning more supply, which causes the price to drop. As long as the supply
exceeds the demand, the price will keep going lower. When price goes down due to an
increase of supply (more sellers), or a decrease of demand (less buyers), the market is
in a downtrend. This type of market is called bearish market, or bear market. During a
downtrend, the bears (the sellers) are in control.
After some time of prices moving up and down, the sellers and buyers find some sort of
equilibrium that maintain the price within a specific trading range. In the image below,
we see the price fluctuating from $4.12 to $4.45 in a time frame of six months. This is
also called a sideways market. The price will remain within this trading range until
something will disrupt the relative balance between supply and demand, causing the
price to drop or soar depending on what buyers and sellers are doing.
Generally, investors and traders shift from being sellers to being buyers and vice versa,
depending on many factors: balance sheets, corporate profiles, company earnings, job
reports, oil prices, bonds, commodities, etc. Sellers and buyers, supply and demand
creates the market. Those factors are simply the cause and effect of supply and
demand.
Both mindsets are needed when trading in the market. When investors feel optimistic
about a company or the general state of the economy, they enter the market with bullish
positions (they buy or go long), which starts driving the price up. When they feel
pessimistic about a company or the general state of the economy, they enter the market
with bearish positions (they sell or go short), which starts driving the price down.
Successful trading is being able to shift in and out of these mindsets depending on the
general perception of the market.
TAKE ACTION
EMOTIONS: THE HIDDEN INGREDIENT

The equation of demand and supply, the battle between bulls and bears, is what creates
the market. When the bulls are in control, demand and consequentially price, increases.
When the bears are in control, supply and consequentially price, decreases. Even
though the market equations are made of the two element of supply and demand, there
is an additional ingredient that has an even greater influence: investors perception and
emotions.
It almost does not matter how well a company is performing (no debt, balance sheet,
strong past earnings). What matters the most is the investors perception of how
strong or weak the market is, how well a company does or not.
If a company is perceived to be doing well, investors want to own shares of that
company, so they buy shares and the price goes up. If a company has good
fundamentals but investors perceive that they can make higher profits somewhere else,
they will sell the company shares causing the price to drop.
Below is the monthly chart of Apple (symbol: AAPL) from 2010 to 2014. Each candle
represents one month. Apple is an excellent company and yet in the period between
October 2012 and May 2013 (8 months) the price of their shares dropped almost 50%
from $100 to just above $50.
If you owned AAPL shares during that period of time, what would you have done?
Perhaps you would be thinking AAPL is great company. I m going to hold onto my
AAPL shares, thinking the price is going to go back up again. One month passes (15%), two months pass (-30%), four months The shares have now lost 40% of their
value.
What are you going to do? Are you buying more shares to compensate your losses?
What if the price keeps going down for another four months? (By the way it does.) Is
the pain of losing more money so great that you cant take it anymore? Are you going to
sell all your AAPL stocks?
This is exactly what emotions do when dealing with market trends and market reversals.
A price that goes up must come down. A price that goes down must come up. Supply
and demand are the obvious elements of the market equation. Emotions are the hidden
one. Finding that hidden element is the key to successful trading.
The same is true with regard to the general market direction. If job reports are strong,
earning season is promising positive returns, sales are increasing, the overall investors
perception of the state of the market is optimistic. As a result they will buy and invest
driving the prices up. On the other hand, if their perception is more pessimistic, because
of poor job reports and other weak economic signs, investors would be more inclined to
sell driving the prices down.
The investors perception and their optimistic or a pessimistic view of market conditions,
stock or any other trading security, is referred to as investors sentiment of emotions and
decision-making. Investors sentiment and more specifically the emotion of fear and
greed are the most important elements of the market equation.
Supply and demand are two elements of the market equation that can be analyzed using
many of the indicators available today: time and sale windows, size of the orders, orders
filled, orders waiting to be filled, Level 2, Total View, levels of support and resistance,
stochastic, RSI
What indicators or piece of technology are going to be used to determine the dominating
investors sentiment of emotions and decision-making during a specific period of time?
The answer is candlestick patterns and signals.
Homma, the father of Japanese candlesticks, discovered the importance of emotions
and their influence in investors decision-making. He knew that the movement of price
action was not the reflection of supply and demand, but especially that price was greatly
influenced by the emotions of fear and greed that every trade experiences.
Homma understood that when emotions are part of the trading equation, the difference
between the price that people are willing to pay and the true value of what has been sold
could be quite significant. He studied the market, identified the effects that emotions had
on price actions and develop candlestick analysis.
The above charts are the same monthly AAPL charts that we discussed earlier. The
chart on the left is a bar chart. The chart on the right is a candlestick chart.
If you knew candlesticks you would have noticed the appearance in October of the
Shooting Star, a candlestick bearish reversal pattern indicating that the market or stock
trend is about to change direction. In November, a big red candle appeared indicating
that the market sentiment in regard to AAPL has turned pessimistic (or bearish). As the
first red candle was forming, (please remember that it took one month to make that kind
of candle) you would have had plenty of time to get out of AAPL and hopefully have
made a decent profit, or at least preserved your capital.
Japanese candlesticks show exactly when investors sentiment of emotions and
decision-making have changed and give us a very clear and distinct signal of when to
get into a trade and when to get out of a trade. Very simple and very effective.
TAKE ACTION
KNOW YOUR TRADING STYLE

There are several different styles of trading: day trading, momentum trading, scalping,
swing trading, position trading and investing. They all follow different strategies and have
a different approach to the market. However, they have one common goal and that is to
profit from price movement.
Basically all traders and investors are fully or partially influenced by two schools of
thought: technical trading and fundamental trading.
TECHNICAL TRADING AND FUNDAMENTAL TRADING

1. Technical Trading
Technical trading, often referred to as technical analysis, is based on chart observation,
horizontal and diagonal line drawing, trend channels and an unlimited number of
indicators.
Day trading, swing trading and position trading fall under the umbrella of technical
trading.
2. Fundamental Trading
Fundamental trading, often referred to as fundamental, analysis is based on the
observation of cash flow statements, balance sheets, price to earning ration (P/E),
earnings per share (EPS), price per book (P/B), return on equity (ROE), return on
investment (ROI) and many other fundamental tools.
Basically the fundamental traders, or analysts, analyze the intrinsic value of a company
and compares the intrinsic value with the stock price value in the market. If the company
is overvalued they sell their stocks. If the company is undervalued they buy their stocks.
Investing falls under the umbrella of fundamental trading.
DAY TRADING
There are three different types of day traders: traditional day traders, momentum traders,
and scalpers.
1. Day Trader
Day traders are individuals that do not hold positions open overnight. Day trading
involves quick intraday buying and selling, where the traders hold the stock oftentimes
for less than an hour. Most day trades are even quicker than that, holding open
positions for less than 10 minutes.
2. Momentum Trader
Momentum traders are individuals that get on board and try to profit from stocks moving
as a result of high trading volume. Most of momentum traders hold their positions for
less than a day.
3. Scalper
Scalpers are individuals that get in and out of a stock (or a group of stocks) multiple
times during the course of the day. Scalpers are basically micro mirroring what market
makers do.
Pros and Cons of Day Trading

The positive aspect about day trading is that traders are not affected by negative news
or earning reports released during the premarket or after the market closes.
One negative aspect about day trading is that the difference between the bid price (the
price buyers are willing to pay for a stock) and the ask price (the price sellers are willing
to sell a stock for) needs to be kept relatively small. The difference between the bid
price and the ask price is known as bid-ask spread. Too big of a spread can be very
costly for day traders.
Every time you place a trade, the broker firm charges a trading commission. Usually the
charge appears twice: the first time is when getting into a trade and the second time is
when exiting that trade.
Because day traders enter and exit several positions during the course of the week, they
get charged many times more than compared to swing traders that place one trade and
hold that same trade for five or ten days. Commissions can be very costly for day
traders.
Momentum and scalping trading have very similar pros and cons of day trading
activities. Scalping also has much higher costs.
Day trading requires a lot of experience, great trading skills, quick responses to market
movements and strong nerves. Day trading is for expert traders only.
SWING TRADING
1. Swing Trader
Swing traders are individuals that profit from stock price movements occurring over a
fairly short period of time. They buy stocks and hold them anywhere between two days
and three weeks. Swing traders rarely open and close a position the same day.
2. Position Trader
Positions traders are individuals with the goal of profiting from a stock price moving in a
steady trend over a certain period of time. They buy stocks and hold them anywhere
from one month to a year.
Pros and Cons of Swing Trading

The negative aspect of swing trading is that by holding stocks overnight they are subject
to news releases reported during the premarket or after the market closes. Sometimes
the news is positive, making the stock jump overnight. Other times the news is negative,
making the stock drop overnight.
The beauty of candlesticks is that they incorporate all the information and decision
making occurring during a specific period of time. Before a positive or a negative news
is released, insiders and other smart money investors are aware of what is about to
happen in that particular stock and they position themselves accordingly. They buy
larger positions if the stock is about to skyrocket; they sell their positions if the stock is
about to crash.
These types of before-it-happens trading activities are perfectly recorded in the
candlestick patterns. By seeing what smart money is doing, traders can mirror their
behavior and positions themselves accordingly.
One of the many positive aspects of swing trading is that of having time to study the
price movements, the price corrections, and the market trend, and to be properly
positioned before bigger price movements occur.
Because swing traders enter and exit fewer positions in a week, they get charged less
frequently than day traders or scalpers. Therefore, commissions are simply the cost for
doing business and do not represent a huge expense that exist for day traders and
scalpers.
Please keep in mind that all trading involves risks. Therefore it is important to learn the
system very well, develop good trading skills and trading strategies, and practice many
hours at a trading simulator, before investing your own money.
In order to be a good swing trader you do not need to be an expert trader. All you need
is patience, mindfulness, good money management and a lot of trading practice.
INVESTING
Investors are individuals that purchase trading securities and hold onto them for longer
period of time. Their goal is to gradually build wealth by buying and holding bonds,
mutual funds, stocks and reinvested dividends.
They pay close attention to market fundamentals, such as price to earning ration (P/E),
earnings per share (EPS), return on equity (ROE), projected earning growth (PEG), price
to sale (P/S), price to book (P/B), book value and dividend payout ratio.
Pros and Cons of Investing

The positive aspect of investing is that in the long run investors can build a large and
wealthy portfolio.
The negative aspect of investing is that stock prices can be influenced by news releases,
earning reports, market corrections and market reversals that occur over a long period of
time.
The other negative aspect of investing is that the capital is going to be looked into a
specific trading security for longer periods of time.
In order to be a good investor you need to have a strong understanding of fundamental
analysis, and as it true for all types of trading, a lot of practice and experience.
WHAT TYPE OF TRADER ARE YOU?

This is an important aspect to understand and develop, because it will help you decide
the kind of strategies you are going to use when approaching the market.
If you had experience with trading, you might already know what type of trader you are.
If you do not have experience with trading, you might want to experiment with each of
the above strategies and see which one you relate to the most. Ultimately, you would
want to find our own niche and trading strategy that matches our personality, knowledge,
resistance to stress and trading skills.
As you build your practice and experience, with time you will find out the type of trader
you are. My own trading practice is focused on swing trading and my courses are based
on swing trading activities. However, the information you will receive can be used in all
circumstances. Whether you are a swing trader, a day trader, a scalper or an investor,
you can benefit from the information you will receive from this eBook.
TAKE ACTION
LINE CHARTS, BAR CHARTS AND CANDLESTICK CHARTS

There are three main types of charts used to analyze market trends and stock values:
line charts, bar charts and candlestick charts.
LINE CHART
Line charts are the most basic and the most common charts used by everyday people.
Examples of line charts are electric and gas usage bills as well as phone minute usage
bills, etc.
In trading, the line chart displays a series of points, representing the closing price of a
specific time frame (5 minute, 10 minutes, 30 minutes, 1 day, 1 week). Drawing a line
to connect the points form the line chart.
Although the line chart is useful to visually recognize the general price trend, the
information provided by the line chart is limited. It only gives the investor one price
value, the closing price, and leaves out three other important prices: opening price, high
price, low price and closing price.
BAR CHART
The bar chart is the most commonly used chart by traders and investors around the
world. It displays a series of vertical lines and horizontal dashes. Drawing a vertical line
that connects the high price with the low price, and two horizontal dashes one on the left
for the opening price and one the right for the closing price, forms the bar chart.
POSITIVE TRADING DAY
NEGATIVE TRADING DAY
The top of the vertical line represents the high price of a specific time frame; the bottom
of the vertical line represents the low price of a specific time frame; the left horizontal
dash represents the opening price of a specific time frame; the right horizontal dash
represents the closing price of a specific time frame.
The four important price values are displayed, which makes bar charts very useful for
trading.
CANDLESTICK CHART
Traders and investors less commonly use candlestick charts because they are
considered to be more complicated and cumbersome than bar charts.
There are more than 150 candlestick signals and patterns showing a level of complexity
and sophistication that most traders do not consider worth learning. However,
candlestick charts are gaining popularity as educational material on the topic is
becoming increasingly available. Education is power.
Candlestick charts are similar to the bar charts as they both display the complete trading
range by showing the four important price values: open, high, low, close (OHLC).
Bar Chart
Candlestick Chart

The main difference is in the body of the chart. After drawing the vertical line to connect
the high and the low, just like in the bar chart, and connecting the horizontal dashes,
both on the left and on the right, a box is formed. The box is called the body of the
candle. The vertical line appearing above the body is called upper shadow. The vertical
line appearing below the body is called lower shadow. The body and the shadows form
what we call candlestick chart (or candle).
If the closing price is higher than the opening price, the color of the candle is green. If
the closing price is lower than the opening price, the color of the candle is red.
The size and the color of the body, and the length of the shadows reveal very important
information regarding the current market direction, possible market reversals and the
strength of future price movements.
Candlestick charts can be used as a tool to benefit from reversal patterns and
continuation patterns during bullish markets (uptrends) as well as bearish markets
(downtrends).
We will discuss in greater detail the importance of such information in following chapters.
BENEFITS OF CANDLESTICK CHARTS

The visual illustration of candlestick charts gives investors and traders an advantage
over traditional western methods of trading.
First of all candlestick charts provide a quick and visual representation of price action
occurring during several time frames that can help investors identify more easily the end
of a downtrend and the beginning of an uptrend.
A series of green ascending candles can be easily identified as an upward trend. A
series of red candles can be easily identified as a downward trend.
For example, the appearance of a green candle after a series of red descending candles
can catch ones attention more easily compared to looking at a bar chart.
Bar Chart
Candlestick Chart
This allows candlestick investors and traders to identify the formation of reversal
patterns and to position themselves on the correct side of a trend.
Secondly the visual illustration provided by the candlestick chart gives candlestick
traders the confidence necessary to get into trades before bigger movements occur and
to get out of trades when it is time to take profits before normal price retracements.
Thirdly candlestick analysis helps create visual and effective trading strategies for
identifying profit targets and protective stops.
When applied with discipline, candlestick analysis helps remove normal but dangerous
emotions arising from the trading experience. This allows candlestick investors and
traders to successfully trade the market with confidence and clarity of mind. This
translates in the ability to buying at the bottom and selling at the top, increasing the
probabilities of greater gains and reducing probabilities of bigger losses.
While the methods of candlestick trading can be taught, the experience of trading itself
cannot. Deeper studies of candlestick trading methods, combined with mindfulness,
cultivation of patience and a lot of practice on trading simulators are essential ingredients
to successful trading. Candlestick analysis and trading methods create a safe and
strong framework for training the eyes as well as the mind, to help establish the
foundation of good trading.
TAKE ACTION
THREE MARKET DIRECTIONS

The market can be moving in three directions: uptrend, downtrend and sideways.
UPTREND
An uptrend market is defined by the price of stocks, commodities or any other trading
security, moving in a general upward direction. The trend is often marked by price
making higher highs (HH) and higher lows (HL). The bulls, the buyers, are in control.
Uptrend market, or bullish market, is influenced by the emotion of greed and excitement.
During an uptrend market, traders and investors buy exuberantly pushing the price up.
This is the kind of market environment where people make the most money.
When faced with this type of market environment, the best thing to do is to buy. In
trading terms buying is referred to as going long, or initiating long positions. There
are two main trading strategies that can be used during an uptrend:
1. Initiating Long Positions
2. Buying Long ETFs
1. Initiating long positions

During an uptrend, the best time to buy is when the market has just started moving up. If
we miss the first wave of rising price, it is not too late to buy. If the wave has just started
and the price is still reasonably low, it is a great time to buy. If the price has moved up a
bit too much, wait for the pullback.
What is a pullback? Basically a price that goes up, then it must come down. Therefore
after a few days of an uptrend, the market starts selling slightly. This is called a
pullback.
The general pullback can last anywhere between two days and a week or two at the
most. Longer pullbacks (two or three months) are also possible, however I consider
those types of pullbacks short-term downtrends.
During a pullback is when people lose money. They have been sitting and watching the
market go up for three or four days and just when they make the decision to buy, the
price starts moving down. For the next couple of days they watch their position lose
money, they get afraid of possibly losing more money and they sell. A few days later the
price starts moving up again. Now they are watching the price go up without them and
they feel frustrated. Patience is required while waiting for the small pullback to finish.
When the bulls steep in and start driving the price up once again, indicating that the
pullback is over, it is time to get on board with them and buy, or go long.
2. Buying Long ETFs

Another way to go long during an uptrend is to buy long exchange-traded funds (ETFs),
also known as directional ETFs or bull ETFs. Long ETFs are mutual funds that can be
bought like individual stocks in the open market.
This type of trading security is bought when the market sentiment is turning positive and
the market indexes such as Dow Jones, Nasdaq, S&P 500 start moving up. Long ETFs
are an easier way to trade the market compared to finding individual stocks and initiating
long positions.
Long ETFs can be used to hedge your portfolio focusing on specific uptrend market
indexes (Dow Jones, Nasdaq, S&P 500, etc) as well as on upward trend sectors
(energy sector, healthcare sector, financial sector).
TAKE ACTION
LIST OF LONG (BULLISH) ETFS

Below is a list of US, international and sector long ETFs, which includes Long (1x), Ultra
(2x) and Ultra Pro (3x). The Long (1x) are the most basic bullish ETFs that perform very
much like their benchmark indices. The Ultra (2x), Ultra Pro (3x), Direxion (2x) and
Direxion (3x) EFTs uses high leverage:
The Ultra (2x) and the Direxion (2x) perform and produce twice as much
gain/loss compared to their benchmark indices
The Ultra Pro (3x) and the Direxion (3) perform and produce three times as much
gain/loss compared to their benchmark indices.
Please keep in mind that the Ultra (2x) and Ultra Pro (3x) and Direxion (2x) and (3x)
ETFs should only be traded intraday. In other words, do not hold the position overnight.
US Style ETFs - Long (1x)

Name
Ticker Symbol
Benchmark Index
Long Nasdaq100
NDX
NASDAQ-100
PowerShares QQQ
QQQ
NASDAQ 100
Long Dow30
DIA
Dow Jones Industrial Average
Long S&P500
SPY
S&P 500
Long Russell 1000
IWM
Russell 1000
Market Cap ETFs - Ultra (2x)

Name
Ticker Symbol
Benchmark Index
Ultra QQQ
QLD
NASDAQ-100
Ultra Dow30
DDM
Ultra S&P500
SSO
S&P 500
Ultra MidCap400
MVV
S&P MidCap 400
Ultra SmallCap600
SAA
S&P SmallCap 600
Ultra Russell2000
UWM
Russell 2000
Ultra Russell3000
UWC
Russell 3000 Index
Market Cap ETFs - Ultra Pro (3x)

Name
Ticker Symbol
Benchmark Index
Ultra Pro QQQ
TQQQ
NASDAQ-100
Ultra Pro Dow30
UDOW
Ultra Pro S&P500
UPRO
S&P 500
Ultra Pro MidCap400
UMDD
S&P MidCap 400
Ultra Pro Russell2000
URTY
Russell 2000
Direxion (3x) Market Cap ETFs

Name
Ticker Symbol
Benchmark Index
Daily Large Cap Bull 3x
BGU
Russell 1000
Daily Mid Cap Bull 3x
MWJ
Russell Midcap
Daily Small Cap Bull 3x
TNA
Russell 2000
Long (1x) Sector US Market

Sector
Ticker Symbol
Benchmark Index
Basic Materials
XLB
S&P Materials Select Sector
Energy
XLE
S&P Energy Select Sector
Financial
XLF
S&P Financial Select Sector
Industrial
XLI
S&P Industrial Select Sector
Technology
XLK
S&P Technology Select Sector
Consumer Staples
XLP
S&P Consumer Staples Select Sector
Utilities
XLK
S&P Utilities Select Sector
Consumer Discretionary
XLY
S&P Consumer Discretionary Select

Sector
Health Care
XLV
S&P Health Care Select Sector
Ultra (2x) Sector ETFs

Sector
Ticker Symbol
Benchmark Index
Basic Materials
UYM
Dow Jones U.S. Basic Materials
Consumer Goods
UGE
Dow Jones U.S. Consumer Goods
Consumer Services
UCC
Dow Jones U.S. Consumer Services
Financials
UYG
Dow Jones U.S. Financials
Health Care
RXL
Dow Jones U.S. Health Care
Industrials
UXI
Dow Jones U.S. Industrials
KBW Regional Banking
KRU
KBW Regional Banking
Nasdaq Biotechnology
BIB
NASDAQ Biotechnology
Oil & Gas
DIG
Dow Jones U.S. Oil & Gas
Real Estate
URE
Dow Jones U.S. Real Estate
Semiconductors
USD
Dow Jones U.S. Semiconductors
Technology
ROM
Dow Jones U.S. Technology
Telecommunications
LTL
Dow Jones U.S. Select

Telecommunications
Utilities
UPW
Dow Jones U.S. Utilities
Direxion (2x) Sector ETFs

Sector
Ticker Symbol
Benchmark Index
Daily Gold Miners Bull 2x
NUGT
NYSE Arca Gold Miners
Daily Natural Gas Related

Bull 2x
GASL
ISE Revere Natural Gas
Daily Retail Bull 2x
RETL
Russell 1000 Retail

Sector
Ticker Symbol
Benchmark Index
Daily Agribusiness Bull 3x
COWL
DAX Global Agribusiness
Daily Basic Materials Bull 3x
MATL
ISE Revere Natural Gas
Daily Retail Bull 2x
RETL
S&P Materials Select Sector
Daily Energy Bull 3x
ERX
Russell 1000 Energy
Daily Financial Bull 3x
FAS
Russell 1000 Financial Services
Daily Healthcare Bull 3x
CURE
S&P Health Care Select Sector
Daily Real Estate Bull 3x
DRN
MSCI US REIT
Daily Semiconductor Bull 3x
SOXL
PHLX Semiconductor Sector
Daily Technology Bull 3x
TYH
Russell 1000 Technology
Ultra (2x) International ETFs

Name
Ticker Symbol
Benchmark Index
Ultra FTSE China 25
XPP
FTSE China 25
Ultra MSCI Brazil
UBR
MSCI Brazil
Ultra MSCI EAFE
EFO
MSCI EAFE
Ultra MSCI Emerging

Markets
EET
MSCI Emerging Markets
Ultra MSCI Europe
UPV
MSCI Europe
Ultra MSCI Japan
EZJ
MSCI Japan
Ultra MSCI Mexico

Investable Market
UMX
MSCI Mexico Investable Market
Ultra MSCI Pacific ex Japan
UXJ
MSCI Pacific ex Japan
Direxion (2x) International ETFs

Name
Ticker Symbol
Benchmark Index
Daily BRIC Bull 2x
BRIL
BNY Mellon BRIC Select ADR
Daily India Bull 2x
INDL
Indus India
Direxion (3x) International ETFs

Name
Ticker Symbol
Benchmark Index
Daily China Bull 3x
YNN
BNY Mellon China Select ADR
Daily Developed Markets

Bull 3x
DZK
MSCI EAFE
Daily Emerging Markets

Bull 3x
EDC
MSCI Emerging Markets Index
Daily Latin America Bull 3x
LBJ
S&P Latin America 40
Daily Russia Bull 3x
RUSL
DAX Global Russia
TAKE ACTION
DOWNTREND
A downtrend market is defined by the price of stocks, commodities or any other trading
security, moving in a general downward direction. The trend is often marked by price
making lower lows and lower highs. The bears, the sellers, are in control.
Downtrend market, or bearish market, is influenced by the emotion of fear and worries.
During a downtrend market, traders and investors panic and sell pushing the price down.
This is the kind of market environment where people lose the most money. In trading
terms selling is referred to as going short, or initiating short positions. There are three
main trading strategies used during a downtrend:
1. Profit taking
2. Initiating Short Positions
3. Buying Inverse ETFs
1 Profit taking
During a downtrend, if buyers want to sell the security they owe, they must sell as soon
as the downtrend is starting. The longer they wait, the bigger the loss. If the wave has
just started and the price is still reasonably high, it is still a good time to sell. Dont wait
any longer hoping that the market will recover. The best way to do this is to set up
protective stops.
If protective stops have not been set up, or if waiting too long and the price has moved
down a bit too much, then wait for a pullback. When the pullback occurs, buy a few more
shares to compensate your losses, and then close (or sell) your position before the next
downward wave occurs.
In the case of a downtrend, the pullback is when a price that goes down, must come up.
In fact after a few days of a downtrend, the market starts buying back slightly. This is
called a bear pullback. The bear pullback can last anywhere between two days and a
week. Longer pullbacks (two or three months) are also possible, however, I consider
those types of pullbacks short-term uptrends.
During a pullback is when people lose money. Lets say that they owe shares of a stock.
They have been sitting and watching their position lose money as the market has been
going down for three or four days. Just when they make the decision to sell, the price
starts moving up. For the next couple of days they watch price moving up, so they buy
back. But because they are in a downtrend, a few days later the price starts moving
down again. Now they are watching their position lose money again as the price
continues move down. They lose money in their portfolio, they lose confidence their
trading strategies and it is a very frustrating and scary scenario.
The key trading strategy with the downtrend scenario is to set up protective stops. When
faced with this type of market environment, the best thing to do is to sell the stocks you
owe. This is called profit taking. When the price was moving up, you bought a trading
security three, five, seven days ago and now that the price is moving down, you sell and
make your profit. Or you did not make money on the trade, but still sell, before bigger
losses occur.
2 Initiating Short Positions

If you do not owe a stock, or other trading securities, and would like to benefit from a
downtrend market, you can go short. What that means is that you can borrow shares of
a stock or other trading securities from a broker and you sell them in the market with the
expectation that the price will move down. Even though you can make money with short
positions, you can also lose more money than you would have anticipated. As a result,
there are specific requirements (margin account) that traders need to meet before being
able to initiate short positions. Please check with your own broker. This type of trading
involves more risks than regular trading because you can lose more money than your
entire capital. Going short is for expert traders only.
If you are a seller who wants to profit from a downtrend, the best time to go short is when
the market has just started moving down. If you miss the first wave of a dropping price,
it is not too late to go short. If the wave has just started and the price is still relatively
high, it is a great time to go short. If the price has moved down a bit too much, then wait
for the bear pullback. Patience is required while waiting for the small bear pullback to
finish.
When the bears steep in and start driving the price down once again, indicating that the
bear pullback is over, it is time to get on board with them and go short.
3 Buying Inverse ETFs

A less risky way to go short during a downtrend is to buy inverse exchange-traded funds
(ETFs), also known as short ETFs or bear ETFs. Inverse ETFs are mutual funds that
can be bought like individual stocks without the requirement of holding a margin account,
and therefore limiting the risk exposure.
This type of trading security is bought when the market sentiment turns negative and the
market indexes such as Nasdaq, Russel 2000, S&P 500 start moving down. Even
though the general market trend is downward and the prices are moving down, when
looking at the chart of an inverse ETF, the general trend is moving upward as the prices
are also moving up. That is why this type of trading security is called inverse. Once you
understand how they work, they are much easier to use than going short with individual
stocks.
Inverse ETFs can be used to hedge our portfolio against drops in market value, as well
as to focus on specific downward trend sectors (energy sector, healthcare sector,
financial sector).
TAKE ACTION
LIST OF INVERSE (BEARISH) ETFS

Below is a list of US, international and sector inverse ETFs, which includes Short (1x),
Ultra Short (2x) and Ultra Pro Short (3x). Short (1x) are the most basic bearish ETFs
that mirror exactly the performance of their bullish counterparts. Short (1x) can be
traded intraday (day trading) and also held overnight (swing trading).
The Ultra Short (2x), Ultra Pro Short (3x), Direxion (2x) and Direxion (3x) EFTs use high
leverage:
The Ultra Short (2x) and the Direxion (2x) perform and produce twice as much
gain/loss compared to their bullish counterparts.
The Pro Short (3x) and the Direxion (3x) perform and produce three times as
much gain/loss compared to their bullish counterparts.
Please keep in mind that the Ultra Short (2x) and Ultra Pro Short (3x) and Direxion (2x)
and (3x) ETFs should only be traded intraday. In other words, do not hold the position
overnight.
Short (1x) US Style ETFs

Name
Ticker Symbol
Benchmark Index
Short QQQ
PSQ
Nasdaq-100
Short Dow 30
DOG
DJIA
Short S&P 500
SH
S&P 500
Short (1x) Market Cap ETFs

Name
Ticker Symbol
Benchmark Index
Short Mid Cap 400
MYY
S&P Mid Cap 400
Short Small Cap 600
SBB
S&P Small Cap 600
Short Russell 2000
RWM
Russell 2000
Ultra Short (2x) US Style ETFs

Ultra Short QQQ
QID
Nasdaq-100
Ultra Short Dow 30
DXD
DJIA
Ultra Short S&P 500
SDS
S&P 500
Ultra Short (2x) Market Cap ETFs

Ultra Short Mid Cap 400
MZZ
S&P Mid Cap 400
Ultra Short Small Cap 600
SDD
S&P Small Cap 600
Ultra Short Russell 2000
TWM
Russell 2000
Ultra Pro Short (3x) US Style ETFs

Ultra Pro Short QQQ
SQQQ
Nasdaq-100
Ultra Pro Short Dow 30
SDOW
DJIA
Ultra Pro Short S&P 500
SPXU
S&P 500
Ultra Pro Short Russell 2000 SRTY
Russell 2000
Ultra Pro Short (3x) Market Cap ETFs

Name
Ticker Symbol
Ultra Pro Short Mid Cap 400 SMDD
Benchmark Index
S&P Mid Cap 400
Ultra Short (2x) Sector ETFs

Sector
Ticker Symbol
Benchmark Index
Ultra Short Basic Materials
SMN
Dow Jones U.S. Basic Materials
Ultra Short Consumer

Goods
SZK
Dow Jones U.S. Consumer Goods
Ultra Short Consumer

Services
SCC
Dow Jones U.S. Consumer Services
Ultra Short Financials
SKF
Dow Jones U.S. Financials
Ultra Short Health Care
RXD
Dow Jones U.S. Health Care
Ultra Short Industrials
SIJ
Dow Jones U.S. Industrials
Ultra Short Real Estate
SRS
Dow Jones U.S. Real Estate
Ultra Short Semiconductors
SSG
Dow Jones U.S. Semiconductors
Ultra Short Oil & Gas
DUG
Dow Jones U.S. Oil & Gas
Ultra Short Technology
REW
Dow Jones U.S. Technology
Ultra Short Utilities
SDP
Dow Jones U.S. Utilities

Sector
Ticker Symbol
Benchmark Index
Direxion Russell 1000

Energy Bearish 3x
BGZ
Russell 1000 Energy Bearish 3x
Direxion Russell 1000

Financials 3x
FAZ
Russell 1000 Financials Bearish 3x
Short (1x) International ETFs

Name
Ticker Symbol
Benchmark Index
Short MSCI EAFE
EFZ
MSCI EAFE
Short MSCI Emerging

Markets
EUM
Ultra Short (2x) International ETFs

Name
Ticker Symbol
Benchmark Index
Ultra Short MSCI EAFE
EFZ
MSCI EAFE
Ultra Short MSCI Emerging

Markets
EEV
Ultra Short MSCI Japan
EWV
MSCI Japan
Ultra Short FTSE/Xinhua

China 25
FXP
FTSE/Xinhua China 25
Name
Ticker Symbol
Benchmark Index
Daily Brazil Bear 3x
BRZS
MSCI Brazil 25-50 Index
Direxion (3x) ETFs
Daily FTSE China Bear 3x
YANG
FTSE China 25 Index
Daily FTSE Europe Bear 3x
EURZ
FTSE Developed Europe Index
Daily Developed Markets

Bear 3x
DPK
MSCI EAFE Index
Daily Emerging Markets Bear 3x EDZ
MSCI Emerging Markets Index
Daily Russia Bear 3x
RUSS
Market Vectors Russia Index
Daily Japan Bear 3x
JPNS
MSCI Daily TR Net Japan USD Index
Daily South Korea Bear 3x
KORZ
MSCI Korea 25-50 Index
TAKE ACTION
SIDEWAYS MARKET
A sideways market is defined by the price of stocks, commodities or any other trading
security, fluctuating between a narrow range of highs and lows. Neither the bears nor
the bulls are in control of the price. It is very difficult to make money during a sideways
market.
Sideways market is the kind of market where people can more easily lose money,
patience and ultimately confidence in their trading skills. It can be very detrimental to
your capital as well as your self-esteem. When faced with this type of market
environment, the best thing to do is to sit on our cash and watch. In other words, do
limited trading activity or do not trade at all.
TAKE ACTION
INTRODUCTION TO REVERSAL PATTERNS

WHAT IS A REVERSAL PATTERN?
A reversal pattern is a price trend change in market direction. A reversal occurs when
the overall price trend of a stock or market value changes direction. A reversal can be
bullish or bearish, meaning uptrend or downtrend.
A series of lower lows and lower highs indicate a price movement characteristic of a
downtrend. When the price trend begins an upward movement making higher highs and
higher lows, it marks the beginning of a reversal. This change of direction is known as
bullish reversal. During a bullish reversal, the price trend changes from a downtrend to
an uptrend.
On the other hand, a series of higher highs and higher lows indicate a price movement
characteristic of an uptrend. When the current uptrend reverses direction and the price
begins making lower lows and lower highs, we call this change of direction bearish
reversal. During a bearish reversal, the price trend changes direction from an uptrend to
a downtrend.
Being able to identify a bullish reversal pattern as it is developing, allows candlestick
traders and investors to buy and position themselves on the right side of the trend, just
before buying pressure and volume activity increases causing the price to rise.
Recognizing the formation of a bearish reversal pattern after a big price movement
allows candlestick investors and traders to sell their position and to take profits before
the selling pressure increases causing the price to drop.
Please keep in mind that trading is not about buying at the lowest price and selling at the
highest price. Thats pretty much impossible. Our job as traders is to catch the
movement in between.
All traders are trying to do, is notice the reversal during its formation phase. Their job is
to pull the trigger, meaning initiating a long position after the stock has printed a bullish
reversal pattern and getting out or initiating a short position after the stock has printed a
bearish reversal pattern.
TAKE ACTION
TEN PRIMARY CANDLESTICK REVERSAL PATTERNS

Candlestick reversal patterns are very important trading formations as they provide
opportunities for bigger profits ahead. Candlesticks formation shows very clearly when
the reversal patterns are forming.
Years of back testing (supported by 300 years of history), shows that at the beginning of
every reversal movement, certain types of candlestick patterns are formed. These
patterns are called candlestick reversal patterns. Candlestick reversal patterns are
powerful signals that indicate that the previous trend has stopped and a new trend
moving in the opposite direction has begun.
In the following chapters we are going to learn the following ten primary reversal
patterns:
1. Doji and its variations (Spinning Top, Dragonfly, Gravestone)
2. Hammer and its variations (Inverted Hammer, Hanging Man)
3. Engulfing (Bullish and Bearish)
4. Harami (Bullish and Bearish)
5. Kicker (Bullish and Bearish)
6. Piercing Line
7. Dark Cloud
8. Morning Star
9. Evening Star
10. Shooting Star
TAKE ACTION
DOJI PATTERNS
PATTERN NO. 1 DOJI STAR
The doji star is formed when the opening price (O) and the closing price (C) are equal or
occur nearby the same level. Basically the doji star formation looks like a cross.
The horizontal line represents the open and close; the vertical line represents the trading
range of that specific time frame.
The doji star formation is a neutral pattern and it indicates indecision. Neither the bulls,
nor the bears have control over the price. When the doji star appears, there is an equal
match between supply and demand; a trend reversal might be in sight.
If one doji star indicates indecision, a series of doji stars indicates more indecision.
Always pay attention when doji stars appear. They can be the precursors to strong trend
reversals.
How to Trade the Doji Star

Because doji stars indicate indecision, any bearish or bullish reversal requires further
confirmation.
What that means is that if after a doji star, or a series of doji stars the price opens higher
than the previous day close, there are high probabilities that the price will start trading
up. In this scenario, the bulls (the buyers) have made the decision to take the price up
and the bears (the sellers) have lost momentum. We are now experiencing a bullish
reversal pattern.
If the doji star appears at the bottom of a downtrend and possibly in oversold conditions,
get ready to buy, or to go long.
On the other hand, if after a doji star, or a series of doji stars, the price opens lower than
the previous day close, there are high probabilities that the price will start trading down.
In this scenario, the bears (the sellers) have made the decision to take the price down
and the bulls (the buyers) have lost momentum. We are now experiencing a bearish
reversal pattern.
If the doji star appears at the top of an uptrend and possibly in overbought conditions,
get ready to sell, or to go short.
The general rule for the doji star pattern is that after a doji star, or a series of doji stars,
the trend will generally move in the direction at which the market opens the next day.
The doji star is a great contributor to any candlestick pattern and a very valuable signal.
DOJI VARIATION 1.1 SPINNING TOP
The spinning top pattern is essentially a doji star formation with a slightly bigger body.
The spinning top pattern is formed when the opening price (O) and the closing price (C)
occur near similar values.
If the closing price is higher than the opening price, the color of the candle is green. If
the closing price is lower than the opening price, the color of the candle is red.
The color of the candle has no real significance with the spinning top. Just like the doji,
the spinning top indicates indecision between the bulls and the bears. Any bearish or
bullish trend reversal requires future confirmation.
How to Trade the Doji Star

The trading criteria for the spinning top are the same as the doji star. When the spinning
top appears at the bottom of a trend it indicates that the downtrend is about to reverse
direction. If the spinning top appears at the bottom of a downtrend and possibly in
oversold conditions, get ready to buy, or to go long.
On the other hand, when the spinning top appears at the top of a trend it indicates that
the uptrend is about to reverse direction. If the spinning top appears at the end of an
uptrend, and possibly in overbought conditions, get ready to sell, or short.
The general rule for the doji star pattern and its variations is that after a doji star, or
spinning top in this case, the trend will generally move in the direction at which the
market opens the next day.
DOJI VARIATION 1.2 GRAVESTONE DOJI
The gravestone doji star is formed when the opening price (O) and the closing price (C)
are equal or occur nearby the same level. The biggest difference between the
gravestone doji and the doji star is that the gravestone doji has a long upper shadow and
a very small or no lower shadow. Doji star has both upper and lower shadows of fairly
equal length.
The gravestone doji indicates that the bulls (buyers) have moved in with some strength
and taken the price up but by the end of the day, the bears (sellers) have taken the price
back down to where it opened.
How to Trade the Gravestone Doji

When the gravestone doji appears at the bottom of a trend it indicates that the
downtrend is about to reverse direction. If the gravestone doji appears at the bottom of a
downtrend and possibly in oversold conditions, get ready to buy, or to go long.
On the other hand, when the gravestone doji appears at the top of a trend it indicates
that the uptrend is about to reverse direction. If the gravestone doji appears at the top of
an uptrend and possibly in overbought conditions, get ready to sell, or to go long.
gravestone doji in this case, the trend will generally move in the direction at which the
DOJI VARIATION 1.3 DRAGONFLY DOJI
The dragonfly doji is formed when the opening price (O) and the closing price (C) are
equal or occur nearby the same level. The biggest difference between the dragonfly doji
and the doji star is that the dragonfly doji has a long lower shadow and a very small or
no upper shadow. Doji star has both upper and lower shadows of fairly equal length.
The dragonfly doji indicates that the bears (sellers) have moved in with some strength
and taken the price down, but by the end of the day the bulls (buyers) have taken the
price back up to where it opened.
How to Trade the Dragonfly Doji

When the dragonfly doji appears at the bottom of a trend it indicates that the downtrend
is about to reverse direction. If the dragonfly doji appears at the bottom of a downtrend
and possibly in oversold conditions, get ready to buy, or to go long.
On the other hand, when the dragonfly doji appears at the top of a trend it indicates that
the uptrend is about to reverse direction. If the dragonfly doji appears at the top of an
uptrend and possibly in overbought conditions, get ready to sell, or to go long.
dragonfly doji in this case, the trend will generally move in the direction at which the
TAKE ACTION
HAMMER PATTERNS
PATTERN NO. 2 - HAMMER
The hammer is essentially a dragonfly doji formation with a slightly bigger body. The
hammer patterned is formed when the following two conditions are present:
1) The length of the lower shadow must be at least twice the size of the body of the
candle. The longer the shadow, the stronger the potential for a reversal.
2) The perfect hammer has no upper shadow. However, if there is a very small
upper shadow above the body of the candle, the formation is still considered a
hammer pattern.
The color of the candle is not as important has the position where the hammer is located
in the trend. However, if the closing price is higher than the opening price, the color of
the candle is green. If the closing price is lower than the opening price, the color of the
candle is red.
A green hammer has more bullish energy than a red hammer. A red hammer has more
bearish energy that a green hammer.
In order to define whether the hammer is a bullish reversal or a bearish reversal, you
need to pay attention to its location in the current trend.
In this chapter you are learning about the hammer, which is a bullish reversal pattern. In
the following chapter, you will learn its bearish counterpart, the hanging man.
Bullish Reversal
When the hammer appears at the bottom of a downtrend or after a series of red candles,
and possibly in oversold conditions, this indicates that a reversal is about to occur. In
this case the hammer pattern is a bullish reversal.
However, further bullish confirmation is required. If the next day the price opens above
the previous day close and the bulls (the buyers) are taking the price up, this is the
bullish confirmation that the reversal has occurred. It is time to buy or to go long.
On the other hand, if the next day the price opens below or near the previous day close,
and the bears (the sellers) start taking the price down, this indicates that we are still in a
downtrend. Be patient and wait for further bullish patterns to form.
HAMMER VARIATION 1.1 HANGING MAN

Bearish Reversal
The bearish version of the hammer is called hanging man. It has the same exact
characteristics of the hammer:
1) The length of the lower shadow must be at least twice the size of the body of the
2) The perfect hanging man has no upper shadow. However if there is a very small
upper shadow above the body of the candle, the formation is still considered a
hanging man pattern.
Here is the main difference between the hammer and the hanging man: The bullish
version of the hammer appears at the bottom of a downtrend, whereas the hanging man,
the bearish version of the hammer, appears at the top of an uptrend.
When the hanging man appears at the top of an uptrend or after a series of green
candles, and possibly in overbought conditions, this indicates that a reversal is about to
occur. In this case the hammer pattern, known as hanging man, is a bearish reversal.
However, further bearish confirmation is required. If the next day the price opens below
the previous day close and the bears (the sellers) are taking the price down, this is the
bearish confirmation that the reversal has occurred.
It is time to sell or to go short.
On the other hand, if the next day the price opens above or near the previous day close,
and the bulls (the buyers) start taking the price up, this indicates that you are still in an
uptrend. Be patient and wait for further bearish patterns to form.
HAMMER VARIATION 1.2 INVERTED HAMMER
The inverted hammer is basically a gravestone doji formation with a slightly bigger body.
The inverted hammer looks exactly as described by its name: an upside down, or
inverted, hammer.
The conditions are the same as the hammer:
1) The length of upper shadow must be at least twice the size of the body of the
2) There could be a very short lower shadow, or even better no lower shadow.
3) It is located at the bottom of a downtrend or after a series of red candles, and
possibly in the oversold conditions.
The color of the candle is not as important has the position where the hammer is located
in the trend. However if the closing price is higher than the opening price, the color of
the candle is green. If the closing price is lower than the opening price, the color of the
candle is red.
A green hammer has more bullish energy than a red hammer. A red hammer has more
bearish energy that a green hammer.
When the hammer appears at the bottom of a downtrend or after a series of red candles,
and possibly in oversold conditions, this indicates that a reversal is about to occur. In
this case the inverted hammer is consider to be a bullish reversal.
However, further bullish confirmation is required. If the next day the price opens above
the previous day close and the bulls (the buyers) are taking the price up, this is the
bullish confirmation that the reversal has occurred.
It is time to buy or to go long.
On the other hand, if the next day the price opens below or near the previous day close,
and the bears (the sellers) start taking the price down, this indicates that we are still in a
downtrend. Be patient and wait for further bullish patterns to form.
TAKE ACTION
ENGULFING PATTERNS
PATTERN NO. 3 ENGULFING
The engulfing pattern usually occurs at the end of a trend. The pattern is made of two
candles of opposite colors. Generally the color of the first candle is the same as the
color of the current marker direction. The exception to the rule is when the first candle is
a doji, in which case the color is irrelevant.
The first candle is a small one. The second candle is at least twice the size of the first
one. The engulfing pattern derives its name from the fact that second candle completely
engulfs the body, and possibly the shadows of the first candle. Please note that the
shadows of the second candles are not taken into consideration. Only look at the body
of the second candle.
The trading volume of the engulfed day is also higher than the previous day. The
engulfing pattern is a high probability signal and it is one of the strongest reversal
patterns.
The engulfing pattern can be bullish or bearish, depending on whether the pattern
appears after a downtrend in which case will have bullish engulfing, or after an uptrend,
in which case we would have a bearish engulfing. Lets look at them separately.
BULLISH ENGULFING
The bullish engulfing pattern is formed at the bottom of a downtrend or after a series of
red candles.
The pattern is made of two candles:
-
The first candle of the bullish engulfing pattern should be red, unless the first
candle is a doji, in which case the color is irrelevant.
The second candle should be green.
The price of the second candle should open below the closing price of the first
candle.
The price of the second candle should close above the opening price of the first
candle.
Thus, the body of the second candle should completely engulf the body and the possibly
the shadows of the first candle. Please note that the shadows of the second candle are
not taken into consideration.
The bullish engulfing pattern shows that the bears are running out of steam on the day of
the first candle, and the bulls are stepping in with great strength on the day of the second
candle.
We should also see a volume increase on the day of the second candle.
The bullish engulfing represents a complete change in investors and traders sentiment
of emotions and decision-making. The bulls (buyers) are now in control over price
action, while the bears (sellers) are stepping aside.
How to trade the bullish engulfing formation

After the appearance of the bullish engulfing pattern, get ready to buy. If the price opens
above the previous day close of the tall green candle, this is the bullish confirmation that
the reversal has occurred and that the bulls are stepping in with even greater strength.
Time to buy or to go long.
BEARISH ENGULFING
The bearish engulfing pattern is formed at the top of an uptrend or after a series of green
candles.
-
The first candle of the bearish engulfing pattern should be green, unless the first
candle is a doji, in which case the color is irrelevant.
The second candle should be red.
The price of the second candle should open above the closing price of the first
candle.
The price of the second candle should close below the opening price of the first
candle.
Thus, the body of the second candle should completely engulf the body and the possibly
the shadows of the first candle. Please note that the shadows of the second candle are
not taken into consideration.
The bearish engulfing pattern shows that the bulls are running out of steam on the day of
the first candle, and the bears are stepping in with great strength on the day of the
second candle.
We should also see a volume increase on the day of the second candle.
The bearish engulfing represents a complete change in investors and traders sentiment
of emotions and decision-making. The bears (sellers) are now in control over price
action, while the bulls (buyers) are stepping aside.
How to trade the bearish engulfing formation

After the appearance of the bearish engulfing pattern, get ready to sell. If the price
opens below the previous day close of the tall red candle, this is the bearish confirmation
that the reversal has occurred and that the bears are stepping in with even greater
strength. Time to sell and close out the position or go short.
TAKE ACTION
HARAMI PATTERNS
PATTERN NO. 4 - HARAMI
The harami pattern usually occurs at the end of a trend. The pattern is made of two
candles of opposite colors. Generally the color of the first candle is the same as the
color of the current marker direction.
The harami pattern is basically the mirror image of the engulfing pattern. In the harami
pattern, the first day is a tall candle and the second day is a small candle. The second
day candle should be half or less the size of the first day candle.
The main characteristic of the harami pattern is that body, as well as the shadows, of the
small second candle is contained within the body of the first tall candle. Please note that
the shadows of the first candle are not taken into consideration.
The pattern derives its name from the Japanese word harami, which means pregnant.
The first tall candle represents the mother, where the second small candle represents
the baby contained within the belly of the mother.
The harami pattern is a common candlestick signal. When confirmed by a higher
opening price the next day, followed by further price action moving in the direction of the
new trend, the harami pattern becomes a very powerful indicator.
The harami pattern can be bearish or bullish, depending on whether the pattern appears
after a downtrend, in which case will have bullish harami, or after an uptrend, in which
case we would have a bearish harami. Lets look at them separately.
BULLISH HARAMI
The bullish harami pattern is formed at the bottom of a downtrend or after a series of red
candles.
-
The first candle of the bullish harami pattern should be a tall and red.
The second candle should be a small green candle.
The price of the second candle should open and close inside the opening and
closing price of the first candle.
Thus, the body and possibly the shadows of the second candle should be completely
contained within the body of the first candle. Please note that the shadows of the first
candle are not taken into consideration.
The bullish harami pattern shows that the downtrend is about to exhaust its energy and
the bulls (buyers) are moving in with some strength. However, like all reversal patterns,
the harami also needs confirmation that the downtrend is over and the formation of the
uptrend is just beginning.
How to trade the bullish harami formation

After the appearance of the bullish harami pattern, get ready to buy.
On the following day, if the price opens above the previous day close of the small green
candle, it means that further buying is taking place. This is the bullish confirmation that
the trend reversal has occurred and that the bulls are stepping in with even greater
strength. Following the appearance of the harami pattern, we should also see a volume
increase.
BEARISH HARAMI
The bearish harami pattern is formed at the top of an uptrend or after a series of green
candles.
-
The first candle of the bearish harami pattern should be a tall and green candle.
The second candle should be a small red candle.
The price of the second candle should open and close inside the opening and
closing price of the first candle.
Thus, the body and possibly the shadows of the second candle should be completely
contained within the body of the first candle. Please note that the shadows of the first
candle are not taken into consideration.
The bearish harami pattern shows that the uptrend is about to exhaust its energy and the
bears (seller) are moving in with some strength. However, like all reversal patterns, the
harami also needs confirmation that the uptrend is over and the formation of the
downtrend is just beginning.
How to trade the bearish harami formation

After the appearance of the bearish harami pattern, get ready to sell.
On the following day, if the price opens below the previous day close of the small red
candle, it means that further selling is taking place. This is the bearish confirmation that
the trend reversal has occurred and that the bears are stepping in with even greater
strength. Following the appearance of the harami pattern, we should also see a volume
increase.
Time to sell or to go short.
TAKE ACTION
KICKER PATTERNS
PATTERN NO. 5 - K ICKER
The kicker pattern is one of the most if not the most powerful candlestick pattern. The
kicker pattern may occur at the beginning at the end or in the middle of a trend.
The kicker pattern represents a 180-degree change in investors sentiment. It is such a
strong reversal pattern that its position in a trend is almost irrelevant.
The pattern is made of two candles of opposite colors. The color of the first candle may
or may not be the same color of the current market direction. The main characteristic of
the kicker pattern is that the opening price of the first candle and the opening price of the
second candle are the same.
The difference between the two candles is that after the open, the price moves in the
opposite direction. The bigger the candle, the stronger the reversal pattern. This is true
for all of the candlestick reversal patterns.
The kicker pattern needs no follow up confirmation as long as the price does not retrace
back to the trading range of the first day.
The kicker pattern can be bullish or bearish, depending on whether the price reversal
occurs after a series of red candles (bullish kicker) or a series of green candles (bearish
kicker).
Please keep in mind that the location of the kicker in a trend is not a required criterion.
Therefore, the kicker pattern can appear in an uptrend, a downtrend or a sideways
market.
Lets look at the bullish kicker and the bearish kicker separately.
BULLISH K ICKER
The strongest version of a bullish kicker is generally formed at the bottom of a downtrend
or after a series of red candles. However, the bullish kicker can appear anywhere in a
trend. It is usually the result of positive news or a positive earning report, often released
in the premarket hour or after the market is closed.
The pattern is made of two candles of opposite colors. The first candle is red and the
second candle is green. The opening price of both candles occurs at the same level, or
near the same level. However, after the opening the price moves in the opposite
direction. On the first day the price moves downward. On the second day, the price
opens at the same level of the opening price of the previous day and it moves upward.
This is a perfect bullish kicker.
If the second day candle opens higher that the first candle opening price, we are
experiencing a gap in price action. Gaps are spaces on the chart where the stock price
jumps, whether up or down, leaving an area unmarked of any trading activity. The
presence of a gap, further enhances the strength of this bullish reversal pattern. The
bigger the gap, the stronger is the reversal.
However, keep in mind that every time there is a gap, the market will try to fill that gap.
In the case of a gap up, the market will try to drop the price down and fill it. Therefore, if
there is a big gap between the red candle day and the following day, expect the price to
move down and try to fill up the gap, before it moves up.
The bullish kicker requires no follow up confirmation.
How to trade the bullish kicker formation

When the bullish kicker is starting to form at the bottom of a downtrend or after a series
of red candles, and the price of the second day opens at the same level or higher than
the previous red candle, get ready to buy, or to go long.
If the price opens at the same level and starts moving up it is time to buy. Please note
that if the price opens much higher than the previous day open, creating a gap, it is
advisable to wait 10 20 minutes. If the price moves down, fills the gap partially or fully
and then starts moving up, it is time to buy, or to go long.
What you dont want to see is the price retracing back to the trading range of the
previous day. So if the price moves down, fills the gap and continues moving down,
obviously this is a sign that the reversal has not occurred. Or at least it has not occurred
yet. Be patient. You might need to wait a few more trading days until a new reversal
pattern is confirmed.
BEARISH K ICKER
The strongest version of the bearish kicker is generally formed at the top of an uptrend
or after a series of green candles. However, the bearish kicker can appear anywhere in
a trend. It is usually the result of negative news or a negative earning report, often
released in the premarket hours or after the market is closed.
The pattern is made of two candles of opposite colors. The first candle is green and the
second candle is red. The opening price of both candles occurs at the same level, or
near the same level. However, after the opening the price moves in the opposite
direction. On the first day the price moves upward. On the second day, the price gaps
down at the same level of the opening price of the previous day and it moves downward.
This is a perfect bearish kicker.
If the second day candle opens lower that the first candle opening price, we are
experiencing a gap in price action. The presence of a gap, further enhances the
strength of this bearish reversal pattern. The bigger the gap, the stronger is the reversal.
However, keep in mind that every time there is a gap, the market will try to fill that gap.
In the case of a gap down, the market will try to bring the price up and fill it. Therefore, if
there is a big gap between the green candle day and the following day, expect the price
to move up and try to fill the gap, before it moves down.
The bearish kicker requires no follow up confirmation.
How to trade the bearish kicker formation

When the bearish kicker is starting to form at the top of an uptrend or after a series of
green candles, and the price of the second day opens at the same level or lower than
the previous green candle, get ready to sell, or to go short.
If the price opens at the same level and starts moving down it is time to sell. Please note
that if the price opens much lower than the previous day open, creating a big gap, it is
advisable to wait 10 20 minutes. If the price moves up, fills the gap partially or fully
and then starts moving down, it is time to sell, or to go short.
What you dont want to see is the price retracing up again to the trading range of the
previous day. So if the price moves up, fills the gap and continues moving up, obviously
this is a sign that the reversal has not occurred. Or at least it has not occurred yet. Be
patient. You might need to wait a few more trading days until a new reversal pattern is
confirmed.
TAKE ACTION
PIERCING PATTERNS
PATTERN NO. 6 PIERCING LINE
The piercing pattern is formed at the bottom of a downtrend or after a series of red
candles.
The pattern is made of two candles of opposite colors:
-
The first candle of the piercing pattern should be red.

The second candle should be green.
The price of the second candle should open below the closing price of the first
candle.
The second candle should close more than halfway up the length of the first
candle.
Usually, the first day of the piercing pattern sees strong downtrend in progress. On the
second day, the bears (sellers) take the price down even further. However, the bulls
step in with strength and start moving the price back up closer to the first day opening
price.
Please keep in mind that the higher the second candle moves up and pierces the first
candle, the stronger the reversal.
How to trade the piercing pattern formation

After the appearance of the piercing pattern, get ready to buy, or to go long.
If the next day, the price opens near or above the previous day close, this is the bullish
confirmation that the reversal has occurred and that the bulls (buyers) are stepping in
with greater strength.
How do we know if the reversal has not occurred? Simple. The reversal has not
occurred if the price opens near the previous day close, moves down and closes the
trading day more than halfway down the green candle of the previous day.
TAKE ACTION
PATTERN NO. 7 DARK CLOUD
The bearish counterpart of the piercing line is called dark cloud. The dark cloud pattern
is formed at the top of an uptrend or after a series of green candles.
The pattern is made of two candles of opposite colors:
-
The first candle of the dark cloud pattern should be green.

The second candle should be red.
The price of the second candle should open above the closing price of the first
candle.
The second candle should close more than halfway down the length of the first
candle.
Usually, the first day of the dark cloud pattern sees strong uptrend in progress. On the
second day, the bulls (buyers) take the price up even further. However, the bears step
in with strength and start moving the price back down closer to the first day closing price.
Please keep in mind that the lower the second candle moves down and pierces the first
candle, the stronger the reversal.
How to trade the dark cloud formation

After the appearance of the piercing pattern, get ready to sell, or to go short.
If the next day, the price opens near or below the previous day close, this is the bearish
confirmation that the reversal has occurred and that the bears (sellers) are stepping in
with greater strength.
How do we know if the reversal has not occurred? Again, simple. The reversal has not
occurred if the price opens near the previous day close, moves up and closes the trading
day more than halfway up the green candle of the previous day.
TAKE ACTION
STAR PATTERNS
PATTERN NO. 8 MORNING STAR
The morning star pattern is formed at the bottom of a downtrend or after a series of red
candles.
The morning star pattern is made of three candles:
-
The first candle of the morning star pattern should be a tall red candle confirming
the downtrend.
The second candle should be a doji or a spinning top pattern, indicating some
sort of indecision. The second candle is the star in the pattern formation.
The third candle should be a fairly tall green candle confirming that the reversal is
occurring. The third candle should open up higher than the second day opening
price and it should close at least halfway up the length of the first candle.
So, on the first day of the morning star you see a strong downtrend, with the bears
(sellers) fully in control.
On the second day, the bears take the price even further, often times with a gap down.
However, during the course of the day we see some bullish activity, where the price
trades near the opening level. The second day indicates indecision, which is
represented by a doji or the spinning top.
On the third day the price opens with a gap on the upside; the bulls are gaining control
and start moving the price higher, closing at least halfway up the first day candle.
The size of the first and third candle indicates the strength of the possible reversal
movement. The bigger the candle, the stronger the reversal. A gap in price, before and
after the star formation (the second candle) indicates an even stronger reversal. The
presence of the gap is ideal, however it is not a required criterion.
How to trade the morning star formation
After the appearance of the morning star pattern, get ready to buy, or to go long.
If on the next day the price opens near or above the previous day close, this is the
bullish confirmation that the reversal has occurred. The bulls are stepping in with greater
strength and the bears are stepping aside.
How do you know that the reversal has not occurred? Basically you want to see a price
that moves up, or at least a price that stays above the halfway point of the third candle of
the morning star pattern.
However, if the price opens near or below the third day opening price and closes below
the halfway point of the third day candle of the morning star pattern, it indicates that the
reversal has not occurred. Be patient and wait for further bullish reversal patterns to
form.
TAKE ACTION
PATTERN NO. 9 EVENING STAR
The evening star pattern is formed at the top of an uptrend or after a series of green
candles.
The evening star pattern is made of three candles:
-
The first candle of the evening star pattern should be a tall green candle
confirming the uptrend.
The second candle should be a doji or a spinning top pattern, indicating some
sort of indecision. The second candle is the star in the pattern formation.
The third candle should be a fairly tall red candle confirming that the reversal is
occurring. The third candle should open up lower than the second day opening
price and it should close at least halfway down the length of the first candle.
So, the first day of the evening star you see a strong uptrend, with the bulls (buyers) fully
in control. On the second day the bulls take the price even further, often times with a
gap up. However, during the course of the day you see some bearish activity, where the
price trades near the opening level. The second day indicates indecision, which is
represented by a doji or the spinning top. On the third day the price opens with a gap on
the downside; the bears are gaining control and start moving the price lower, closing at
least halfway down the first day candle.
The size of the first and third candle indicates the strength of the possible reversal
movement. The bigger the candle, the stronger the reversal. A gap in price, before and
after the star formation (the second candle) indicates an even stronger reversal. The
presence of the gap is ideal, however, it is not a required criterion.
How to trade the evening star formation

After the appearance of the evening star pattern, get ready to sell, or to go short.
If on the next day the price opens near or below the previous day close, this is the
bearish confirmation that the reversal has occurred. The bears are stepping in with
greater strength and the bulls are stepping aside. Time to sell or to go short.
How do we know that the reversal has not occurred? Basically you want to see a price
that moves down, or at least a price that stays below the halfway point of the third candle
of the evening star pattern.
However, if the price opens near or above the third day opening price and closes above
the halfway point of the third day candle of the evening star pattern, it indicates that the
reversal has not occurred. Be patient and wait for further bearish reversal patterns to
form.
TAKE ACTION
PATTERN NO. 10 SHOOTING STAR
The shooting star pattern is formed at the top of an uptrend or after a series of green
candles.
The shooting star pattern is made of two candles:
-
The first candle is a tall green candle, indicating that the uptrend is still in place.
The second candle has a smaller body, with a long upper shadow and a very
small or no lower shadow and looks like an inverted hammer. The color of the
second candle is irrelevant. However, a red candle has more bearish energy
than a green candle.
The first day indicates bullish energy taking the price up. On the second day exuberant
buying pressure pushes the price even higher. However, by the end of the day, the
bears (sellers) have taken the price back down near or below the level of the opening
price. The selling pressure has increased and so has the trading volume of the day.
However, like with all of the patterns, bearish reversal confirmation is required.
How to trade the shooting star formation

After the appearance of the shooting star pattern get ready to sell, or to go short.
If on the next day the price opens lower, near or below the closing price of the shooting
star day and the bears (sellers) move the price down, this is the bearish confirmation
that the bears are stepping in with greater strength.
What you do not want to see is a price that opens below the previous day close and
starts moving back up towards the trading range of the previous day. If the price closes
near of above the previous day close, the reversal pattern has not occurred. Be patient
and wait for further bearish reversal patterns to form.
TAKE ACTION
CONCLUSION
Because of the incredible amount of financial news and information available 24/7,
ironically causing more confusion than clarity, candlestick analysis is a very important
tool to have in todays marketplace. If you are interested in understanding the market as
an investor or a trader who wants to learn how to make consistent profits then Japanese
candlesticks will help you achieve that.
Candlesticks help investors and traders cut through the noise of news and information,
giving a clearer view of what is happening in the market in order to design more effecting
and successful trading strategies. If candlesticks analysis was a valuable instrument 300
years ago, it is even more valuable to day.
If you have enjoyed this eBook and found it useful, I would appreciate it if you would post
a short review on Amazon. Thank you for your support and learning with
SharperTrades.com and making this eBook successful.
Good trading!
TAKE ACTION

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TRADE LIKE A PRO

Copyright 2014 by Luca Moschini. All rights reserved.

TRADING RISK DISCLAIMER

INTRODUCTION TO JAPANESE CANDLESTICKS

10 Primary Reversal Patterns

SUPPLY AND DEMAND: THE DRIVING FORCE OF THE

EMOTIONS: THE HIDDEN INGREDIENT

KNOW YOUR TRADING STYLE

TECHNICAL TRADING AND FUNDAMENTAL TRADING

Pros and Cons of Day Trading

Pros and Cons of Swing Trading

Pros and Cons of Investing

WHAT TYPE OF TRADER ARE YOU?

LINE CHARTS, BAR CHARTS AND CANDLESTICK CHARTS

POSITIVE TRADING DAY

NEGATIVE TRADING DAY

POSITIVE TRADING DAY

NEGATIVE TRADING DAY

POSITIVE TRADING DAY

NEGATIVE TRADING DAY

BENEFITS OF CANDLESTICK CHARTS

THREE MARKET DIRECTIONS

1. Initiating long positions

2. Buying Long ETFs

LIST OF LONG (BULLISH) ETFS

US Style ETFs - Long (1x)

Dow Jones Industrial Average

Long Russell 1000

Market Cap ETFs - Ultra (2x)

Dow Jones Industrial Average

S&P MidCap 400

S&P SmallCap 600

Russell 3000 Index

Market Cap ETFs - Ultra Pro (3x)

Ultra Pro QQQ

Ultra Pro Dow30

Dow Jones Industrial Average

Ultra Pro S&P500

Ultra Pro MidCap400

S&P MidCap 400

Ultra Pro Russell2000

Direxion (3x) Market Cap ETFs

Daily Large Cap Bull 3x

Daily Mid Cap Bull 3x

Daily Small Cap Bull 3x

Long (1x) Sector US Market

S&P Materials Select Sector

S&P Energy Select Sector

S&P Financial Select Sector

S&P Industrial Select Sector

S&P Technology Select Sector

S&P Consumer Staples Select Sector

S&P Utilities Select Sector

S&P Consumer Discretionary Select

S&P Health Care Select Sector

Ultra (2x) Sector ETFs

Dow Jones U.S. Basic Materials

Dow Jones U.S. Consumer Goods