BULLISH JAPANESE

CANDLESTICKS & STRATEGIES 2017

Bullish Japanese
Candlesticks & Strategies
A guide to using this popular and trusted Technical Analysis tool
Examples of Forex and CFD Strategies

Written by
Andreas Thalassinos
(FXTM Head of Education)
1
 BULLISH JAPANESE
CANDLESTICKS & STRATEGIES 2017

About the Author

FXTM’s Head of Education, Andreas Thalassinos, is a respected FX
educator and Certified Technical Analyst. He is a recognised authority
in the forex industry, and renowned for his expertise in algorithmic
trading. After years of consulting with FXTM on a number of key projects,
Andreas officially joined the company in June 2016 and is the principal
driver and architect of FXTM’s extensive educational programme.
His department’s international seminars and workshops, provide
clients across the world with on-location support, while his webinars,
e-books, educational articles and videos, form the cornerstone of
FXTM’s multilingual, open access training resources. The training is
tailored to traders’ needs by region and experience level.

Thalassinos has played a key role in the development of forex

education within the industry, training tens of thousands of traders
and forex professionals around the world. Traders of all levels value his
seminars and workshops for both content and his passionate and lively
presentations. As Head of Education, Thalassinos also plays a pivotal
role in FXTM’s research and development team. In this capacity, he led
the development of the FXTM Trading Signals and FXTM Pivot Points
Strategy tools, which are designed to help traders’ spot potential
trading opportunities across various trading instruments.

Thalassinos has been awarded a number of international professional

certificates including: MSTA by the Society of Technical Analysts (UK),
CFTe and MFTA by the International Federation of Technical Analysts
(USA) – the highest qualifications in the technical analysis community.
He also holds a BSc and MSc in Computer Science from University of
Louisiana at Lafayette and Bowie State University, respectively.

6
 BULLISH JAPANESE
CANDLESTICKS & STRATEGIES 2017

06 BULLISH REVERSALS
6.1 Long White Body

“
6.2 Hammer

A TECHNICAL ANALYST’S GOAL

6.3 Belt Hold

IS TO IDENTIFY THE TREND

IN ITS EARLY STAGES.
“ 6.4 Engulfing Pattern

6.5 Harami

6.6 Piercing Lining

- Andreas Thalassinos 6.7 Tweezers

6.8 Homing Pigeon

6.9 Three White Soldiers

6.10 Morning Star

7
 BULLISH JAPANESE
CANDLESTICKS & STRATEGIES 2017

06 BULLISH REVERSALS

6.8 HOMING PIGEON

The decline continues to record lower prices as reflected by the
long black candle. Next session is characterized by a smaller
black body that is completely engulfed by the previous long black
body, signalling weakness, setting the stage for further descent.

Color of the body Black

Range of the body Long
Meaning
Range of the upper shadow Small
Sellers take advantage of the falling market, entering or adding onto their short
positions. Buyers find prices attractive entering the market with long positions. Range of the lower shadow Small
They do this in order to take advantage of the opportunity; pushing away from Location End of downtrend or decline
the low levels of the previous session, as the market action is contained in the
range of the previous open and close. As sellers demonstrate reluctance to push
prices lower, a possible bullish reversal could be in the making.
Color of the body Black
Supply/Demand Direction
Equilibrium. Possible bullish reversal. Range of the body Small
Range of the upper shadow Small
Sentiment Trigger Range of the lower shadow Small
Neutral. Consider buying if the next candlestick
exceeds the high of the pattern. Location Follows along black candle.
The small candle is engulfed
within the previous candle’s
body.

15
 BULLISH JAPANESE
CANDLESTICKS & STRATEGIES 2017

07 BULLISH
STRATEGIES
7.1 Contrarian entry with Hammer, RSI and SMA (50)

“
7.2 Contrarian Entry with Piercing Line, RSI and SMA(50)

as Take-Profit target
TO RELY ON RUSTICS AND NOT
7.3 Harami with RSI filtering and SMA(20) as Take Profit Target
PREPARE IS THE GREATEST OF CRIMES;
TO BE PREPARED BEFOREHAND FOR
ANY CONTINGENCY IS THE GREATEST
OF VIRTUES.
“ 7.4 Tweezers with RSI and SMA(20)

7.5 Homing Pigeon with CCI and SMA(20)

7.6 Resistance with Long White Body and LWMA(50)

- Sun Tzu
7.7 Three White Soldiers with RSI and SMA(20)

7.8 Morning Star filtered by Stochastics and EMA(50)

7.9 Engulfing with Stochastics and LWMA(20)

7.10 Belt Hold with Stochastics and EMA(20)

18
 BULLISH JAPANESE
CANDLESTICKS & STRATEGIES 2017

07 BULLISH
STRATEGIES
7.5 Homing Pigeon with CCI and SMA(20)
During the course of a decline the appearance of the Homing Pigeon pattern filtered by CCI at the oversold area.

One could consider buying when the next candle exceeds the high price of the pattern.
Place a protective stop loss at the bottom of the pattern.

You can consider the following actions, bearing in mind that a Take-Profit strategy is
heavily dependent on the trading profile of each individual.

1. Close 50% of the position when price travels 100% the length of the pattern.
a. Close the remaining 25% when price reaches the 200% of the length of the
pattern above SMA(20).
b. Move the protective stop-loss at the top of the pattern.
c. Close the remaining 25% of the position at the presence of a reversal
candlestick or when price falls below the SMA(20).
2. Other combinations may be applied

23
 BULLISH JAPANESE
CANDLESTICKS & STRATEGIES 2017

NOTES TO EDITORS
The FXTM brand provides international brokerage services and gives access to the global currency markets, offering trading in forex, precious metals, Share CFDs, and CFDs on Commodity
Futures. Trading is available via the MT4 and MT5 platforms with spreads starting from just 1.3 on Standard trading accounts and from 0.1 on ECN trading accounts. Trading on the
MT5 platform is not available for Forextime UK Limited. Bespoke trading support and services are provided based on each client’s needs and ambitions - from novices, to experienced
traders and institutional investors. ForexTime Limited is regulated by the Cyprus Securities and Exchange Commission (CySEC), with licence number 185/12 and licensed by the SA FSCA
with FSP number 46614. Forextime UK Limited is authorised and regulated by the Financial Conduct Authority, firm reference number 777911. Exinity Limited (www.forextime.com) is
regulated by the Financial Services Commission of the Republic of Mauritius with an Investment Dealer License bearing license number C113012295.

DISCLAIMER: This written/visual material is comprised of personal opinions and ideas. The content should not be construed as containing any type of investment advice and/or a
solicitation for any transactions. It does not imply an obligation to purchase investment services, nor does it guarantee or predict future performance. FXTM, its affiliates, agents,
directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness of any information or data made available and assume no liability for any loss
arising from any investment based on the same.

RISK WARNING: Trading Forex and CFDs involves significant risk and can result in the loss of your invested capital. You should not invest more than you can afford to lose and should
ensure that you fully understand the risks involved. Trading leveraged products may not be suitable for all investors. Before trading, please take into consideration your level of experi-
ence, investment objectives and seek independent financial advice if necessary. It is the responsibility of the Client to ascertain whether he/she is permitted to use the services of the
FXTM brand based on the legal requirements in his/her country of residence.

30