The Candlestick Forecaster Samurai Edition User Manual Copyright Ó 2000 Highest Summit Technologies Sdn Bhd. All Rights Reserved. LICENCE AGREEMENT THE CANDLESTICK FORECASTERÒ software constitutes a CD having copyrighted computer software accompanied by a copyrighted user manual in which all copyrights and ownership rights are owned only by Highest Summit Technologies Sdn Bhd (HST). HST grants to you a non-exclusive license to use a copy of The Candlestick Forecaster software on a single computer and the terms of this grant is effective unless violated. You may call and discuss with us by telephone any questions about the installation and use of The Candlestick Forecaster software by calling our office at (603) 245-5877, fax us at (603) 245-6792 or email us at [email protected]. We reserve the right to discontinue technical support at anytime without notice to you. You are not entitled to sub-license, rent, lease, sell, pledge or otherwise transfer or distribute the original copy of The Candlestick Forecaster software. Modification, disassembly, reverse engineering or creating derivative works based on the software or any portion thereof is expressly prohibited. Copying of the manual is also prohibited. Breach of these provisions automatically terminates this agreement and subjects you to further legal implications. The Candlestick Forecaster is warranted for ninety (90) days from the date of purchase to be free of defects in materials and workmanship under normal use. To obtain replacement of any material under this warranty, you must return the inaccurate CD or copy of the manual to us within the warranty period or notify us in writing within the warranty period that you have found an inaccuracy in The Candlestick Forecaster software and then return the materials to us. This limited warranty covers the original user (the purchaser) and HST makes no other express warranties. ANY AND ALL IMPLIED WARRANTIES RELATING HERETO ARE LIMITED IN DURATION TO THIS NINETY-DAY WARRANTY PERIOD. REPLACEMENT OF CD OR THE MANUAL IS YOUR EXCLUSIVE REMEDY AND SOLE MEASURE OF RECOVERABLE DAMAGES. THE CD AND THE MANUAL IS LICENSED “AS IS” WITHOUT WARRANTY OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. HST DOES NOT WARRANT THAT ANY FUNCTIONS CONTAINED IN THIS PACKAGE WILL MEET YOUR MANUAL REQUIREMENT OR THAT Copyright Ó 2000 Highest Summit Technologies Sdn Bhd. All Rights Reserved. YOUR USE OF THE PACKAGE WILL BE UNINTERUPTED OR ERROR FREE. WE SHALL HAVE NO LIABILITY TO YOU OR ANY THIRD PARTY REGARDING THE CANDLESTICK FORECASTER SOFTWARE IN WARRANTY, CONTRACT, AND TORT OR OTHERWISE. IN NO EVENT WILL HST BE LIABLE FOR ANY DIRECT, INCIDENTAL, SPECIAL, INDIRECT, GENERAL OR CONSEQUENTIAL DAMAGE OR LOSS OF ANY NATURE (SUCH AS DAMAGE TO PROPERTY, DAMAGES RESULTING FROM INACCURACY, INCOMPLETENESS, SOFTWARE INSTABILITY, CLAIMS FROM USER OR THIRD PARTIES LOSS OF PROFITS OR FINANCIAL INJURY TO PERSONS) WHICH MAY ARISE IN CONNECTION WITH THE USE OR INABILITY TO USE THE PROGRAM OR MANUAL. THIS CLAUSE SHALL SURVIVE FAILURE OF ANY EXCLUSIVE REMEDY. IMPORTANT NOTE Investments involve risks, including possible loss of principal and other losses. This program is designed to provide a training tool for the understanding of technical analysis of the financial markets. It is licensed to the End-User with the understanding that HST is not engaged in rendering any investment or other professional advice. If investment or other professional advice is required, the services of a competent professional person should be sought. HST will not be responsible for any losses or lost profits resulting from investment decisions based on the use of this program, information obtained through use of this program, or otherwise. The laws of Malaysia govern this agreement. In the event a provision of this Agreement shall be held unenforceable, it shall be deemed severable from the remaining provisions and shall in no way affect the validity or enforceability of this Agreement. Copyright Ó 2000 Highest Summit Technologies Sdn Bhd. All Rights Reserved. Copyright Ó 2000 Highest Summit Technologies Sdn Bhd. All Rights Reserved. INDEX CHAPTER 1: INTRODUCTION WELCOME ………………………………………………………… 1 DOCUMENT CONVENTIONS ……………………………………. 3 CHAPTER 2: GETTING STARTED HARDWARE REQUIREMENTS …………………………………... 5 PRE-INSTALLATION CHECK LIST ………………………………. 6 INSTALLING THE SAMURAI ……………………………………. 7 LAUNCHING SAMURAI FROM WINDOWS ……………………. 7 CANDLESTICK FORECASTER MAIN SCREEN ………………... 8 SETTING THE PROGRAM DEFAULT …………………………… 9 ACCESSING SAMPLE DATA …………………………………….. 10 CHAPTER 3: OVERVIEW TRADING WITH CANDLESTICK ANALYSIS …………………... 11 WHAT CANDLESTICKS REPRESENT? ……………………. 14 SAMURAI CANDLE TOOLS …………………………………….... 17 THE CANDLE BOX ………………………………………….. 17 THE ANALYSIS WINDOW …………………………………... 18 THE CANDLEWATCHÔ …………………………………….. 19 THE CANDLEVISIONÔ ……………………………………... 20 PROFIT TESTING MODULE ………………………………… 21 TRADER'S LOG ………………………………………………. 22 CHAPTER 4: NAVIGATING THROUGH SAMURAI MOVING AROUND IN SAMURAI ……………………………….. 23 THE MENUS ………………………………………………………... 24 THE FILE MENU ……………………………………………... 25 THE DISPLAY MENU ………………………………………... 25 THE OPTIONS MENU ………………………………………... 26 THE QUICK ARROW MENU ………………………………... 26 THE CANDLEWATCHÔ MENU ……………………………. 27 THE CANDLEVISIONÔ MENU …………………………….. 27 THE DOWNLOAD MENU ……………………………………. 28 THE WINDOWS MENU ……………………………………… 28 THE HELP MENU ……………………………………………. 29 KEYBOARD SHORTCUTS ………………………………………... 30 SPEED BUTTONS ………………………………………………….. 31 RIGHT MOUSE BUTTON POP-UP MENUS ……………………… 32 BEGIN ANALYSIS ……………………………………………. 32 CHART OPTION ……………………………………………… 33 LIBRARY OPTIONS ………………………………………….. 34 TECHNICAL INDICATORS …………………………………. 35 Copyright Ó 2000 Highest Summit Technologies Sdn Bhd. All Rights Reserved. CANDLEWATCHÔ …………………………………………... 36 CANDLEVISIONÔ …………………………………………… 36 CHAPTER 5: GATHERING & MODIFYING DATA DAILY DATA UPDATES ………………………………………….. 37 MANUAL ENTRY FROM DISK …………………………………... 38 EDIT SPECIFIC PRICE DATA ………………………………. 38 CHAPTER 6: MANIPULATING CHARTS LOADING CHARTS ……………………………………………….. 39 CHANGING THE FILE TYPE ……………………………………... 39 GROUPING …………………………………………………………. 42 SETUP CHART TABS ………………………………………... 42 CHANGING THE APPEARANCE OF THE CHART ……………... 44 TECHNICAL INDICATORS ………………………………… 45 LIBRARY SETTINGS ………………………………………… 46 CHART OPTIONS …………………………………………….. 47 DIRECTORY SETTINGS …………………………………….. 48 COMPRESSING DATA …………………………………………….. 49 CHANGING THE INDICATORS DISPLAYED ON YOUR SCREEN.. 51 DISPLAYING TECHNICAL INDICATORS ………………… 51 STOCHASTIC OSCILLATOR …………………………... 52 MOVING AVERAGES …………………………………... 53 RSI – RELATIVE STRENGTH INDEX …………………. 54 RMI – RELATIVE MOMENTUM INDEX ……………… 55 WILLIAMS PERCENT RETRACEMENT ………………. 56 DISPLAYING VOLUME ………………………………… 57 LEGENDS ………………………………………………… 58 SAVING CUSTOM PAGES AND PRINTING CHARTS …………. 59 SAVING CUSTOM PAGES …………………………………... 59 PRINTING CHARTS ………………………………………….. 60 KEEPING NOTES WITH TRADER'S LOG ……………………….. 62 CHAPTER 7: ANALYZING CHARTS MANIPULATING THE CANDLE POINTER ………………………. 63 ANALYZING A CANDLE …………………………………………. 63 USING CANDLEWATCHÔ ……………………………………….. 65 SELECTING FILES TO WATCH ……………………………. 66 STARTING THE CANDLEWATCHÔ ………………………. 68 THE CANDLEWATCHÔ REPORT …………………………. 70 USING CANDLEVISIONÔ ………………………………………... 72 STARTING THE CANDLEVISIONÔ ……………………….. 73 CANDLEVISIONÔ FLAGS ………………………………….. 76 WHAT ARE CANDLEVISIONÔ FLAGS? ……………... 76 EXPLANATION OF VISION FLAGS …………………... 77 DEMARK SEQUANTIAL FLAGS ………………………. 79 Copyright Ó 2000 Highest Summit Technologies Sdn Bhd. All Rights Reserved. WHY VISION FLAGS ARE IMPORTANT ……………… 80 WHEN TO USE VISION FLAGS ……………………….. 80 PROFIT TESTING MODULE ……………………………………… 81 SETTING THE OPTIONS …………………………………….. 82 CHAPTER 8: TECHNICAL SUPPORT CANDLE ASSIST …………………………………………………... 85 APPENDIX CUSTOM PAGES …………………………………………………... 87 MAIN MENU AND HOT KEYS FUNCTIONS …………………… 88 NEW TOOL BAR FUNCTIONS …………………………………… 89 EXTENDED PATTERN GROUPS .………………………………… 93 CONFIRMATION …………………………………………….. 93 CONTINUATION ……………………………………………... 95 A BUY SCENARIO ………………………………………. 96 CONFLUENCE ………………………………………………... 98 CLUES AND SUGGESTION FROM CANDLESTICKS ………….. 100 THREE LINE NEW PRICE BREAK ……………………………….. 102 THREE LINE NEW PRICE BREAK TRADING RULES ……... 103 TOM DEMARK SEQUENTIAL PATTERNS ……………………... 105 THE SETUP …………………………………………………… 105 TAKAHIRO HIKITA PATTERNS …………………………………. 107 TRENDING CANDLE/BODY REVERSAL PRINCIPLE …………. 108 A TRENDING CANDLE (TC) ………………………………... 108 A BODY REVERSAL (BR) …………………………………... 109 AN UPWARD TREND ………………………………………... 110 A TREND REVERSAL ………………………………………... 111 A BULLISH TREND ………………………………………….. 112 A BEARISH TREND ………………………………………….. 113 GAP IN TREND ……………………………………………….. 114 TREND-STOP LEVEL ………………………………………... 115 VALID TC/BR ………………………………………………… 115 ADVANTAGES AND PROPERTIES OF THE TC/BR SYSTEM …... 116 TRADING TIPS WITH THE TC/BR SYSTEM ……………………. 118 GLOSSARY BASIC CANDLE FORMATIONS ………………………………….. 121 RECOGNISING DAILY CANDLE PATTERNS …………………... 122 THE EMPTY (WHITE OR RED) POLE LINES .…………………... 122 PATTERN DESCRIPTION …………………………………………. 122 PATTERN INTERPRETATION ……………………………………. 125 FULL (BLACK) POLE LINES ……………………………………... 128 PATTERN DESCRIPTION …………………………………………. 128 PATTERN INTERPRETATION ……………………………………. 130 THE LINE AND STAR CANDLE ………………………………….. 133 Copyright Ó 2000 Highest Summit Technologies Sdn Bhd. All Rights Reserved. PATTERN DESCRIPTION …………………………………………. 133 PATTERN INTERPRETATION ……………………………………. 134 MULTIPLE CANDLE PATTERNS