Candlestick Trading Bible Flashcards

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Questions and Answers

What is the Candlestick Trading Bible?

One of the most powerful trading systems in history.

Who invented the Candlestick Trading Bible?

Homma Munehisa.

How is Homma Munehisa regarded in trading history?

He is considered the most successful trader in history.

What is called Candlestick Anatomy?

The different body sizes of candlesticks. Signup and view all the answers

What are candlestick patterns?

An integral part of technical analysis. Signup and view all the answers

What will you learn about market structure?

How to identify trending, ranging, and choppy markets. Signup and view all the answers

Why is multiple time frame analysis important?

It helps in analyzing the market effectively. Signup and view all the answers

What kind of trading strategies will you learn?

Four price action trading strategies. Signup and view all the answers

What is the focus of money management in trading?

Creating a money management and risk control plan. Signup and view all the answers

The Japanese were looking at charts as far back as __________.

the 17th century Signup and view all the answers

Rice trading had been established in Japan in with _ following soon after.

1654, with gold, silver and grape seed oil Signup and view all the answers

Rice markets dominated at this time and the commodity became more important than ______.

Japan, hard currency Signup and view all the answers

Munehisa Homma, a Japanese rice trader born in , is widely credited as being one of the _____

the early 1700s, early exponents of tracking price action Signup and view all the answers

Munehisa Homma (aka _ ), understood , but also identified the fact that _____________

Sokyu Honma, basic supply and demand dynamics, emotion played a part in the setting of price. Signup and view all the answers

He wanted to track the _ of the market players, and this work became the basis of ______.

emotion, candlestick analysis. Signup and view all the answers

He was extremely , to the point of being promoted to ____.

well respected, Samurai status. Signup and view all the answers

The Japanese did an extremely good job of __________, right up until the _, when suddenly there was a large _______ of banks and financial institutions around the world.

keeping candlesticks quiet from the Western world, 1980s, cross-pollination. Signup and view all the answers

This is when ________ suddenly got wind of these mystical charts. Obviously, this was also about the time that charting in general suddenly became a lot _, due to the widespread use of the ____.

Westerners, easier, PC. Signup and view all the answers

What happened in the late 1980s regarding candlestick interest?

Several Westerners became interested in candlesticks. Signup and view all the answers

Study Notes

Candlestick Trading Bible Overview

A powerful trading system recognized historically for its effectiveness.
Originated by Homma Munehisa, known as the father of candlestick patterns.

Homma Munehisa

Considered the most successful trader in history, earning over $10 billion in today's value.
Renowned as the "God of markets" during his time.

Candlestick Anatomy & Psychology

Candlesticks vary in body size, which reflects market psychology.
Understanding the anatomy aids in grasping trading dynamics.

Candlestick Patterns

Integral to technical analysis, reflecting human behavioral patterns.
Recognition of key patterns and their psychological underpinnings is crucial for traders.

Market Structure

Differentiation between trending, ranging, and choppy markets is essential.
Techniques for identifying support, resistance, and trendlines are discussed.

Time Frames and Analysis

Multiple time frame analysis is vital; top-down analysis helps in effective market evaluation.

Trading Strategies and Tactics

Four main price action strategies: pin bar, engulfing bar, inside bar, and inside bar false breakout.
Emphasis on mastering fundamental concepts for effective strategy implementation.

Money Management

Importance of creating a solid money management and risk control plan to protect trading capital and ensure profitability.

Historical Context of Candlesticks

Candlestick techniques predate Western counterparts, with origins traced back to the 17th century in Japan.
Earliest known U.S. charts appeared in the late 19th century.

Rice Trading in Japan

Established in 1654, followed by trading in gold, silver, and grape seed oil.
Rice trade significantly influenced Japan's economy, surpassing the role of hard currency.

Munehisa Homma’s Contributions

Born in the early 1700s, he was an early proponent of price action tracking.
Recognized both supply-demand dynamics and emotional influences on prices.

Lasting Influence of Candlesticks

Homma aimed to analyze market emotions, laying the groundwork for candlestick analysis.
The Japanese maintained a low profile on candlestick techniques until the 1980s, when global interest surged.

Western Adoption and Technological Advancements

Increased interest from Western traders in the late 1980s coincided with advancements in charting technology due to personal computers.

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Description

Test your knowledge of the Candlestick Trading Bible with these flashcards. Learn about its origin, the influential trader Homma Munehisa, and the power of candlestick patterns. This quiz will enhance your understanding of one of the most effective trading systems in history.