Terms Of Trade - Share Market Education

Every Sunday Carl Capolingua who often appears on Sky Your Money Your Call, features an article around trading strategy in the Herald Sun.

Below are a couple of excerpts from these articles to help guide the way through the share market and hopefully assist in your own individual trading strategy.

The Power Of Three – Japanese Candlestick Patterns

Today we will look at two of the better known Japanese candlestick patterns on a chart; the Three White Soldiers and the Three Black Crows.

Three White Soldiers Like many Japanese candlestick formations, the ‘Three White Soldiers’ owes its name to the nature of Japanese society in the 1600s, which was saw continuous battles between feudal lords, as well as the emergence of the Dojima Rice Exchange in Osaka.

The Three White Soldiers is a bullish reversal pattern, which is characterised by three consecutive, advancing large white (or green) candles. Like all reversal patterns, we need to see a decent downtrend first, otherwise there would be nothing to reverse.

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Fibonacci Retracements In Identifying Support And Resistance

Much has been written about Leonardo Fibonacci, the gifted thirteenth-century Italian mathematician. Born in Pisa around 1170, Fibonacci not only introduced the modern use of decimal points, but also discovered the so-called Fibonacci sequence. The sequence begins with 0 and 1, and then adds the previous two numbers to produce a third, e.g. 0, 1, 1, 2, 4, 5, 8, 13, 21 etc.

The sequence then continues onwards to infinity. These numbers are seen as the “key” to nature, with the reproduction cycles of rabbits, branching patterns seen in plant life, and the “golden mean” used in art and architecture all corresponding to this mathematical sequence. Fibonacci discovered that the ratios in this sequence not only recur in nature but can also be seen in markets to indicate likely retracement levels.

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