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Ron William
Technical Analyst
Email: rwilliam@investorsintelligence.com
investorsintelligence.com
Brief History
• Market timing, charting, behavioural finance
& quantitative analysis.
• Methodology dates back to 1600s, originally
used by Japanese rice farmers to monitor and
forecast crop prices.
• Famous trader named Homma (aware of
supply/demand links), realised the markets
were strongly influenced by emotions.
• Introduced to the west in 1990 by Steve Nison,
a leading expert in candlestick analysis.
Constructing the Candle
Line
Bullish Candle Bearish
White Real Candle
H
Body Black H
Real
igh Upper Body
igh
Clos Shadow O
e pen
Real
Body
O Clos
pen Lower e
Low Shadow Low
The Real Body is the essence
of market psychology
Basic Candles
Strong buy/sell Open and close 1. Small real body 1. Small real body
are narrow/same 2. Colour not imp. 2. Colour not imp.
Midpoint used as 3. Long shadows
support/resistance Market is tired Prior trend weak
Indicates confusion
Doji
3
4
1 2
Doji in box range
USD/ZAR (Daily Chart)
Series of doji
within box range
merely sets tone
Single Line
Hammer Shooting Star
Support
Shooting Star
Risk? Wheat (Weekly Chart)
Selling on close
implies risking
Sell?
the pattern high
Preferred Sell
Dual Line
Engulfing Dark Cloud Cover Piercing Line
1. Downtrend evident
1. Large RB wraps 1. Uptrend evident
2. Session opens <
around small RB 2. Session opens >
prior low
2. Opposite colours prior high
3. Bullish RB closes
3. Up/Down trend 3. Bearish RB closes
>50% into bearish RB
> 50% into bullish RB
Sell
Three Line
Morning Star Evening Star 3 White Soldiers 3 Black Crows
1. Downtrend evident 1. Uptrend evident 1. Three bullish RB’s, 1. Three bearish RB’s,
2. Bearish session 2. Bullish session all of similar size all of similar size
is followed by is followed by 2. Prior trend is down 2. Prior trend is up
indecision. indecision. 3. Each session opens 3. Each session opens
3. Bulls close > 50% 3. Bears close > 50% with recent RB & with recent RB &
into prior Bear RB into prior Bull RB closes near high closes near lows
Hammer
Piercing Line
High-wave
70-week
average
Piercing Line
Price Patterns
Soybean (Daily Chart)
3 White
Soldiers
Shooting Star
Shooting Star
3 White
Soldiers
3 White
Soldiers
(variant)
Confluence
EUR/USD (Daily Chart)
61.8%
50%
Measured Objective
38.2%
Relative Strength
Index
CRB (Weekly Chart)
Bollinger Bands
Oil (Daily Chart)
Bearish
Engulfing
Hammer Hammer
Dark Cloud
Dark Cloud Cover
Cover
Bullish
High-Wave Engulfing
Hammer
Elliott Wave
Gold (Daily Chart) (3)
(4)?
(1)
(2)
Corrective Wave
(4)?
Gold (Weekly Chart) (3)
Dark Cloud
Hanging
Cover
Man
Presentation slides
designed by Ron William