Brainy's Share Market ToolboxBrainy's Share Market Toolbox
An arsenal of weapons to help you tackle the share market.
Monthly eBook (pdf) Articles
Candlestick Essentials -- follow up

Just one of the tools in my Share Market Toolbox
August eBook Articles Update #33 - August 2011
Dear Reader,   
This month's eBook Articles email contains some extremely useful information to help us understand the underlying mood in the market. So it is going to all Toolbox Members, and to the people who have registered to receive occasional information about the Share Market. (Any non-member who no longer wants to receive this material can simply unsubscribe using the SafeUnsubscribe link at the bottom - or just Update Your Profile to change your interests.) 

Two months ago I explained that share price charts hide a wealth of information about the mood and sentiment of the market, with clues about likely future share price movement - in the chart patterns in particular (eg. triangles, etc.). And last month I continued that theme and explained how even more information is available in the candlesticks - both the features of individual candles, and also in the patterns of multiple candles (like the Hanging Man pattern shown at right).  And last month I had some new Member-only web pages to support this material (links are in the July eNews email, or follow the links from this updated candlestick public page).  


In preparing the material for my contribution to The Age newspaper a couple of weeks ago (see the published article, or a scanned copy), I decided to post some extra material about market turning points, the Tower Bottom candle pattern and compound candles. You can see that here in the Toolbox. This prompted me to update two existing eBook Articles about candlesticks, and to write two new ones. There are now four eBook Articles in the Toolbox that cover the subject of candlesticks and candle patterns. 


More details below.


Over the next few months, the topics of focus in this monthly eNews email will include: 

  • Money and Risk Management, including position size (ie. how to minimise losses and maximise profits).
  • Liquidity - how to avoid thinly traded stocks. 

Please read on....  

Recent focus topics
The monthly focus in the last few months has been:
For the benefit of all the new readers this month,
useful information in the last few month's emails is
available in the email archive (no password needed).
This month's focus:
Candlestick interpretation
and candle addition   
Candle addition
Candle addition

In last month's focus we looked at candlestick charts and patterns. To support that material we had some new web pages in the Share Market Toolbox for members (web links to these pages are in the next section below).


Last month's material is extended this month with one new eBook Article which supports the new web pages from last month, and includes three A4-size candle pattern posters.


And there is another new Article on Composite Candles and Candle Addition. This describes a topic that is rarely talked about - the notion of "adding together" two or more candles to produce just one candle. This is depicted in the accompanying sample graphic, where a black candle and an engulfing bullish white candle together comprise the Bullish Engulfing candle pattern. But if we "add" these two candles together, the result is the third "Compound Candle" shown in the diagram which is actually a Hammer pattern. 


Understanding this idea, and being able to apply it, can make a big difference to what we can "see" in the candle charts, and our interpretation of the underlying market mood and sentiment. See the Candlestick eBook Articles listed below for more details, and especially Article TA-3780, "Composite candles...".


Toolbox web pages with Candle details

[This section is repeated from last month.] Here is a summary list of useful web pages (most for Toolbox Members, requiring username and password):
How to spot the candle patterns?

One of the things that puzzled me for a long time when I started studying candle patterns, was that there is a very long list of different patterns, and it is so hard to work out which pattern is which, and what they all mean. [Can you relate to that?] There is a lot of web-based material available that describes many candle patterns, but nothing to help explain how to easily identify the various candle patterns - until now!
So, in addition to my new candlestick material last month, I have written the new eBook Article TA-3710, "Candlestick interpretation". See the link below.


Candlestick eBook Articles

This month the two existing eBook (PDF) Articles on candles have been re-written (and re-numbered), and two more Articles have been added to the collection:
  • TA-2100 "Price charts and time periods" (unchanged) provides an introduction to price charts, and describes the key differences between line charts and candle charts (the free page 1 for non-members is here). 
  • * TA-3700 "Candlesticks explained" - (the free page 1 for non-members is here). This Article has been renumbered this month, and updated (please dispose of the earlier version with Article number TA-3110). 
  • TA-3710 "Candlestick Interpretation" - (the free page 1 for non-members is here). This brand new 6-page Article supports the new candlestick web pages that were announced last month. This Article goes into more detail, and it is easier to print for future reference, and it includes the three A4-size candle identification posters. 
  • * TA-3750 "Candlestick patterns" - (the free page 1 for  non-members is here). This Article has been renumbered this month, and updated (please dispose of the earlier version with Article number TA-3700). 
  • TA-3780 "Composite candles and candle addition" - (the free page 1 for non-members is here). This 6-page Article is brand new and explains a topic that is rarely talked about - the usefulness of understanding that if we look at two candles together as a single "compound candle", we can often better understand the underlying mood and sentiment of the market. 

* - These two Articles have been renumbered this month.


There are now a total of 104 Articles in this eBook collection of Articles (435 pages of information)! You can see the Master List of all Articles here (recently new or updated ones are highlighted), and the Detailed Topic Index here. And don't forget to see the updated Table of Contents pages (see links in side-bar at right).  

eBook (PDF) Articles - Summary 

Over the last two years I have accumulated quite a collection of eBook (PDF) Articles on three subject areas - Share Trading/Investing, Technical Analysis and BullCharts software (actually more than 400 pages of material in more than 100 articles). These Articles are invaluable for both new and experienced investors and traders.


I am now writing brief monthly notes in this eNews email to highlight specific Articles on targeted topics. I am also writing new Articles and updating existing ones as required. For more information about the changes, see the December 2010 eNewsletter email in the eNews email Archive.


For more information see:

Article front pages 
As of early January 2011 with the change in publishing approach for 2011, I significantly revised the Introduction Article and the Overview Article for each of the three subject areas. You can see them here:
Any problems?

What if you have some sort of problem with accessing the Toolbox and any of these Articles? Or maybe the Username and Password doesn't work. If there is any problem at all, simply contact me by email or phone. The best email address for this is: Occasionally emails disappear - the system thinks they are spam, or the ISP might think they are spam. If I don't reply within a day or so, please contact me by other email address or phone.
In Closing

There is nothing secret in this email, so feel free to forward it to someone if you think they might benefit from the information, or from being a Toolbox Member. The easiest way to do this is to use the "Forward Email" link at the bottom.
I am also confident that my Toolbox Members won't be sharing their username and password with non-members. It is not fair that I spend all this time preparing the materials, and then my Toolbox Members pay money to have legitimate access, only to let some people pay nothing to read and view the details.
Please feel free to email an individual Article to others as a sample; but if they want online access to all the materials, it is pretty cheap, so they should subscribe as a Toolbox Member. There is information about Toolbox Membership in the Quick Links section at right. 
Happy to receive feedback, or suggestions for new content or improvements.
Until next month,
Happy investing or trading,

Robert B. Brain
(mobile: 0438 355 910)

ps: watch out for the sharks in the ocean!

In This Issue
Recent Topics
Quick Links
Candle Spotting
eBook Articles
Articles summary
Revised Intro
Any Problems?

I am always very happy to receive feedback about the Toolbox, and the articles and weapons therein.

Please feel free to contact me by email or phone.

How to contact - click here.
Quick Links

Articles Master List of all eBook (pdf) Articles

Introductory information About the Articles

Detailed Topic Index

Robert's BullCharts Knowledgebase
The latest
Table of Contents pages for:
Share Trading,
Technical Analysis

Share Market Toolbox - What is it?
Go to the Online Shop to become a
Toolbox member. 
Join as a Toolbox Member by printing the
manual order form
complete the details and send in the mail with payment.
The Members Area Gateway (lists all Toolbox features)

Robert Brain (Brainy) | 23 Nathan Street | Ferntree Gully | Victoria, | 3156 | Australia